Temasek Holdings Limited, a Singaporean state-owned investment firm, has reduced the pay package of its executives who gave the green light to a failed $275 million investment in the now-collapsed cryptocurrency exchange FTX.
In a statement on Monday, May 29th, Temasek said that while they found “no misconduct” in the investment decision, it damaged the reputation of the company. Company executives who were responsible for investment now had their compensation reduced. The statement reads:
“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 was Second-Largest Outside FTX Investor
According to the statement, an independent team conducted an internal review of the investment, which it initiated shortly after the exchange collapsed in November 2022, and findings were presented directly to the Board Risk & Sustainability Committee and Board of Directors.
Per a Forbes report in November 2022, Temasek made hefty investments in both FTX international and FTX US. The investment firm was the second-largest outside investor in FTX after Sequoia Capital, with 7 million shares.
A statement issued a few days after FTX filed for bankruptcy protection reveals that Temasek invested $210 million in FTX international and $65 million in FTX US. The statement reads:
“We invested US$210 million for a minority stake of ~1% in FTX International, and invested US$65 million for a minority stake of ~1.5% in FTX US, across two funding rounds from October 2021 to January 2022. The cost of our investment in FTX was 0.09% of our net portfolio value of S$403 billion as of 31 March 2022.”
The firm noted that its investment in FTX was not “an investment into cryptocurrencies.” The value of Temasek’s $275 million investments in FTX, which is now written off, peaked at $320 million in January 2022.
The firm always stood by its claims that it “conducted an extensive due diligence process on FTX, which took approximately 8 months from February to October 2021.” It reviewed FTX’s audited financial statement, licensing & regulatory compliance of the exchange, and sought consultation from external legal and cybersecurity specialists to make investments in the crypto exchange.
Teamsk said it was FTX that intentionally hid its fraudulent activities from investors, including Temasek. “Nevertheless, we are disappointed with the outcome of our investment and the negative impact on our reputation,” said the Temasek Chairman.
In the recent development of the FTX bankruptcy case, the recent court document reveals that an FTX reboot plan, called FTX 2.0, is underway.
