Compensation reduced for Temasek executives behind FTX stake

Executives at Singapore investment firm Temasek Holdings who were responsible for the company’s investment in FTX will have their pay reduced. Reports suggest that the firm was the second-largest external investor in FTX, which is now insolvent.

This development comes after Temasek conducted 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.

However, the company stated in its announcement on May 29 that its investigations, which included a review of FTX’s financial statements, assessment of the various regulatory threats associated with financial service providers in the crypto space, and seeking legal advice, found no misconduct.

In addition, the company sought input from people with direct insights into FTX, including its employees, fellow investors, and industry participants.

Despite the absence of any misconduct, Temasek’s senior management team and investment body collectively accepted responsibility and agreed to a reduction in their compensation.

Last year, Temasek claimed to have performed “extensive due diligence” lasting eight months on FTX, and that its audited finances made it seem like a profitable venture.

The Singapore-based firm is reported to have owned 7 million shares in FTX before its collapse and was required to explain why its $275 million investment failed.

In November 2022, Temasek revealed that its investment in FTX accounted for 0.09% of its net portfolio value, which reached $293.5 billion (SGD 403 billion) in 2022. Of this, $210 million represented a 1% stake in FTX International, while $65 million was a 1.5% stake in FTX.US. However, a few days later, the company announced that it had written off its entire investment.

Temasek’s chairman, Lim Boon Heng, expressed disappointment about the investment’s outcome and its negative effect on the company’s reputation.

Following FTX’s failure, Temasek announced its intention to revamp its investment evaluation process, particularly for fast-growing companies.

The company emphasized that it has no plans to invest in cryptocurrency assets and will be extremely cautious when evaluating new opportunities in the blockchain industry. It is worth noting that FTX was the only cryptocurrency company in which Temasek had invested.

“We believe that we must invest in new sectors and emerging technologies to understand their impact on the business and financial models of our existing portfolio, and whether they will be drivers of future value in an ever-changing world,” the company stated.