By
Chimamanda U. Martha
April 19th, 2024
According to Temasek, despite the absence of any misconduct, both its senior management team and investment body assumed collective accountability and accepted a reduction in their compensation.
Executives of Singapore investment firm Temasek Holdings who oversaw the company’s investment in FTX will have their compensation slashed. According to reports, the firm ranked second among the major external investors in the now-insolvent FTX.
The latest update comes after Temasek carried out an internal assessment of its funding six months ago. During this assessment, the investment company disclosed that certain executives and the senior management team deliberately concealed fraudulent activities that affected both investors and Temasek.
The company, however, revealed in its May 29 announcement that there was no misconduct found after its investigations which covered reviewing FTX’s financial statements, assessing the numerous regulatory threats associated with financial service providers in the crypto space, and seeking legal advice.
Additionally, the firm sought input from people with direct insights into FTX, including its employees, fellow investors, and participants within the industry.
According to Temasek, despite the absence of any misconduct, both its senior management team and investment body assumed collective accountability and accepted a reduction in their compensation.
Temasek stated last year that it had performed “extensive due diligence”, lasting eight months on FTX, and that its audited finances sold it as a profitable venture.
The Singapore-based company is said to have owned 7 million shares in FTX before its demise and was compelled to give an explanation as to why its $275 million investment went south.
In November 2022, Temasek disclosed that its investment in FTX accounted for 0.09% of its net portfolio value which reached the level of $293.5 billion (SGD 403 billion) as of 2022. Out of this, $210 million represented a 1% stake in FTX International, at the same time $65 million was a 1.5% stake in FTX.US. However, just a few days later, the company announced that it had completely written off its investment.
Lim Boon Heng, chairman of Temasek, expressed the firm’s disappointment concerning the investment’s outcome and its adverse effect on their reputation.
Following the collapse of FTX, Temasek announced its intention to revamp its investment evaluation process, particularly for fast-rising companies.
Emphasizing its stance, the firm stated that it has zero plans to throw money into crypto assets and will be extremely cautious when assessing new opportunities in the blockchain world. It is worth noting that FTX was the sole investment Temasek had in a cryptocurrency company.
“We hold the belief that we have to invest in new sectors and emerging technologies to understand the necessary impact on the business and financial models of our existing portfolio and if they would be drivers of future value in an ever-changing world,” the company stated.