Singapore’s Temasek Holdings on Monday said it reduced the compensation of its investment team and senior management, following the company’s failed investment in the now-collapsed FTX cryptocurrency exchange.
The state investor said that while they found “no misconduct by the investment team in reaching their investment recommendation,” the decision to cut compensation was made to take “collective accountability,” Chairman Lim Boon Heng said in a statement following an internal review.
The decision comes after Temasek, one of the world’s largest state investors, wrote down its entire USD 275 million exposure last year after the crypto company’s collapse. Across two funding rounds from October 2021 to January 2022, it invested USD 210 million in FTX International and USD 65 million in FTX US, both for minority stakes.
Since then, an independent team has conducted an internal review of Temasek’s investment, with the findings directly presented to the board, according to the company. Temasek did not specify the size of the cut or how many staff were affected.
“With FTX, 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,” Lim said. “Nevertheless, we are disappointed with the outcome of our investment, and the negative impact on our reputation.”
Speaking at the parliament in November, Singapore’s Finance Minister Lawrence Wong said Temasek, which is a major shareholder of the city-state’s largest companies including Singapore Airlines and Singapore Telecommunications, had suffered “reputational damage” due to its investment in FTX.
Wong, the heir apparent to become Singapore’s next leader, described the earlier optimism about blockchain may “have proven to be too optimistic,” even though Singapore will keep pursuing experiments with the technology.
Temasek noted that while there are inherent risks whenever they invest, the company invests in new sectors and emerging technologies “to understand how these areas may impact the business and financial models of our existing portfolio, and whether they would be drivers of future value in an ever-changing world.”
“This is why we invest in early-stage companies,” the company added.