Singapore Investment Firm Temasek Cuts Compensation for Employees Responsible for FTX Investments

Singapore investment firm Temasek Holdings said Monday it has scaled back compensation for the team that recommended investments in the collapsed crypto exchange FTX and its senior management team.

Temasek began an internal review of its investment in FTX about six months ago.

According to a statement issued by Temasek Chairman Lim Boon Heng on the firm’s official website on Monday, "Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced."

Temasek did not disclose the exact amount of the compensation reduction.

Temasek said the cost of its investment in FTX was 0.09% of its net portfolio, or $304 billion, as of March 31, 2022. The company is currently not directly exposed to the risks posed by cryptocurrencies.

Temasek said last year that it had conducted "extensive due diligence" on FTX and that its audited financial statements at the time "showed it to be profitable."

FTX's other backers, such as SoftBank Group's SoftBank Vision Fund and Sequoia Capital, also marked their investments down to zero after FTX filed for bankruptcy protection.

"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 in the statement on Monday. "Nevertheless, we are disappointed with the outcome of our investment, and the negative impact on our reputation."

Lim said Temasek seeks to achieve sustainable returns over the long term by investing in companies in the early stages.

"While there are inherent risks whenever we invest, we believe that we have to invest 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," Lim added.

(Source: Reuters)