Last year, news of FTX’s collapse shocked the cryptocurrency industry. The impact was compounded further by the fact that state investor Temasek Holdings had written down its full investment in the cryptocurrency exchange.
An internal review was held to assess the learning outcomes from this loss.
Around half a year later, following the review, Temasek Holdings announced that it would cut compensations for the investment team and senior management responsible for the investment decision.
On Monday (29 May), Temasek Holdings’ chairman Lim Boon Heng released a statement regarding their internal review.
He explained Temasek’s reasoning for investing in early-stage companies, highlighting that despite the high risks, they could be “drivers of future value in an ever-changing world”.
Unfortunately, Temasek Holdings had misplaced their trust in FTX’s CEO, Sam Bankman-Fried. According to Mr Lim, FTX admitted that there was fraudulent conduct intentionally hidden from investors, including Temasek.
The collapse of FTX caused Temasek Holdings to experience a loss of S$377 million in investments.
Nevertheless, we are disappointed with the outcome of our investment, and the negative impact on our reputation.
Since the incident, an independent team in Temasek Holdings conducted an internal review of the investment. They then presented their findings to the Board Risk & Sustainability Committee and Temasek Holdings’ Board.
In the end, Mr Lim said while there was no misconduct, the investment team was still responsible for the investment decisions.
As such, the investment team and senior management took “collective accountability” and had their compensation cut.
Last November, Deputy Prime Minister Lawrence Wong assured that the significant losses would not impact Temasek’s net investment return contribution (NIRC).
He emphasised that risk-taking is an essential part of investments in new technology and early-stage companies and reminded everyone that Temasek has no direct exposure to crypto.
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Featured image adapted from Temasek via Nikkei Asia.
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