Temasek, the Singapore state investor, 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 after a six-month internal review conducted by Temasek, which resulted in a writedown of $275 million.
While there was no misconduct found by the investment team in their recommendation, both the investment team and senior management have taken collective accountability and accepted a reduction in their compensation. Temasek Chairman Lim Boon Heng made this announcement in a statement posted on Temasek’s website on Monday. However, the exact amount of the compensation cut was not disclosed.
As of March 31, 2022, Temasek had stated that its investment in FTX accounted for 0.09 percent of its net portfolio value, which amounted to S$403 billion ($304 billion). Additionally, Temasek clarified that it currently holds no direct exposure to cryptocurrencies. In the previous year, Temasek had also conducted thorough due diligence on FTX, and the audited financial statement at that time indicated the exchange’s profitability.
Following FTX’s filing for bankruptcy protection in the U.S. last year, other backers of the exchange, including SoftBank Group’s Vision Fund and Sequoia Capital, had also written down their investments to zero. In the statement issued on Monday, Chairman Lim mentioned that prosecutors alleged fraudulent conduct at FTX, which was admitted by key executives and affiliates. This fraudulent behavior was intentionally concealed from investors, including Temasek. Despite this, Temasek expressed disappointment with the investment’s outcome and the negative impact it had on their reputation.
Lim emphasized that Temasek’s goal is to achieve sustainable returns over the long term through investments in early-stage companies. He stated that while there are inherent risks in investing, it is necessary to invest in new sectors and emerging technologies to understand their potential impact on existing business and financial models. This approach allows Temasek to assess whether these areas could be drivers of future value in an ever-changing world.
