Singapore’s prominent state investor, Temasek Holdings, announced on Monday that it has implemented pay cuts for the team and senior management responsible for recommending its investment in the now-bankrupt FTX cryptocurrency exchange. Temasek Chairman Lim Boon Heng clarified that there was no evidence of misconduct by the investment team in their recommendation process. However, as a display of collective accountability, the team has voluntarily accepted compensation reductions. The exact details of the reduction were not disclosed in the statement posted on Temasek’s official website.
This decision comes approximately six months after Temasek initiated an internal review of its investment in FTX, which ultimately led to a substantial writedown of $275 million. As of March 31, 2022, Temasek stated that its investment cost in FTX accounted for a mere 0.09% of its net portfolio value of S$403 billion ($304 billion). Furthermore, the company clarified that it currently holds no direct exposure to cryptocurrencies.
Temasek emphasized that prior to the investment, extensive due diligence was conducted on FTX, and the audited financial statements at that time showed the exchange to be profitable. However, following FTX’s bankruptcy protection filing in the United States last year, its major backers, including SoftBank Group Corp’s Vision Fund and Sequoia Capital, wrote down their investments to zero. Temasek expressed disappointment with the outcome of their investment and the subsequent impact on their reputation, as they believe fraudulent conduct was intentionally hidden from investors, including Temasek.