Temasek Holdings Reduces Compensation after FTX Investment Review

Singapore state investor, Temasek Holdings, cuts compensation for teams involved in FTX investment after internal review and $275 million writedown.

Credit: REUTERS

Singapore state investor Temasek Holdings (TEM.UL) has announced a reduction in compensation for the team responsible for recommending its investment in the now-bankrupt FTX cryptocurrency exchange, as well as its senior management team.

This decision comes approximately six months after Temasek initiated an internal review of its FTX investment, resulting in a $275 million writedown.

In a statement posted on Temasek's website on Monday, Temasek Chairman Lim Boon Heng stated, "Although the investment team did not engage in misconduct when making their investment recommendation, both the investment team and senior management, who bear ultimate responsibility for investment decisions, have accepted collective accountability and experienced a reduction in compensation." The exact amount of the compensation cut was not disclosed.

Temasek had previously revealed that its cost of investment in FTX amounted to 0.09% of its net portfolio value of S$403 billion ($304 billion) as of March 31, 2022. Additionally, Temasek clarified that it currently holds no direct exposure to cryptocurrencies.

Last year, Temasek stated that it had conducted extensive due diligence on FTX and found its audited financial statement to be profitable. However, after FTX filed for bankruptcy protection in the U.S., other investors such as SoftBank Group Corp's (9984.T) Vision Fund and Sequoia Capital reduced their investments in FTX to zero.

Regarding the FTX investment, Chairman Lim commented, "According to allegations by prosecutors and admissions from key FTX executives and affiliates, fraudulent conduct deliberately concealed from investors, including Temasek, took place. Despite this, we are disappointed with the investment outcome and the resulting negative impact on our reputation."

Lim emphasized that Temasek aims to generate sustainable returns over the long term by investing in early-stage companies. He added, "While investing always carries inherent risks, we believe it is necessary to invest in new sectors and emerging technologies to understand their potential impact on our existing portfolio's business and financial models. This allows us to identify drivers of future value in an ever-changing world."

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• Singapore's Temasek Holdings has reduced compensation for the team involved in recommending its investment in the now-bankrupt FTX cryptocurrency exchange and its senior management team.

• The reduction comes after an internal review and a $275 million writedown of the FTX investment.

• Temasek clarified that its investment cost in FTX accounted for 0.09% of its net portfolio value and that it currently holds no direct exposure to cryptocurrencies.

• Other investors, including SoftBank and Sequoia Capital, also marked down their investments in FTX to zero.

• Temasek expressed disappointment with the investment outcome and its impact on the company's reputation.

• The investment firm aims to achieve sustainable returns by investing in early-stage companies to understand the potential impact on its existing portfolio.