Temasek Holdings, a private company whose sole stakeholder is the Singaporean Government and whose only purpose is overseeing investments for said government, was responsible for the second-largest investment into FTX.
Poor Judgement
Prior to the collapse of FTX, Temasek’s investment was worth about $275 million, representing 0.09% of the company’s total investment portfolio worth about $304 billion.
Following the collapse of the platform – which led to Temasek writing off its investment completely – Temasek Holdings performed an internal investigation into the matter to avoid any further damage to its reputation.
Temasek was not the only investment firm to write off its investment, although it was the most significant investment to be scratched. Other firms that did the same include Sequoia Capital, Softbank, and the Ontario Teachers’ Pension Plan.
Despite the write-offs, FTX still currently owes various creditors about $52 billion, $44 billion of which are claims recently filed by the IRS.
5/ Some of the following #FTX‘s institutional investors have said they will be writing down their FTX investments to $0:
• Temasek Holdings – $275M
• Sequoia Capital – $213.5M
• Softbank – $100M
• Ontario Teachers’ Pension Plan – $95M
— CoinGecko (@coingecko) December 3, 2022
Temasek’s internal post-mortem investigation has now concluded, with the firm’s internal auditing service declaring that no misconduct was detected on their side, although the auditors stressed that critical information that should have been made available to investors – Temasek among them – had been hidden by FTX.
Nevertheless, the failed investment damaged the reputation of Temasek Holdings, according to Chairman Lin Boon Heng.
“As alleged by prosecutors and as admitted by key executives at FTX and its affiliates, there was fraudulent conduct intentionally hidden from investors, including Temasek. We are disappointed with the outcome of our investment, and the negative impact on our reputation.”
Investment Team Took Responsibility
Since the decision to invest in FTX was made in good faith – and the due diligence performed by Temaseks’ investment department was also done in a rigorous and professional manner – no internal sanctions were handed out.
However, the investment team who decided to greenlight the investment and senior management who approved it have reportedly taken full responsibility for the venture going sour. As a result, those responsible have had their yearly compensation reduced.
“The investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced.”
The investment firm declined to comment on whether the employees’ bonuses or salaries were cut. Temasek also remained tight-lipped about the exact amount of compensation cut from its employees’ payroll.
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