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Singapore-based financial powerhouse, Temasek Holdings, has slashed the salaries of key executives who played a crucial role in directing the company's funds into the ill-fated cryptocurrency platform, FTX.
During its peak, FTX received substantial backing from Temasek, with the investment titan holding an impressive 7 million shares, making it the second-largest external supporter, according to Forbes data. However, the significant downfall of the crypto platform raised questions about Temasek's investment decision.
Temasek recently announced the completion of its internal investigation into the substantial loss of $275 million resulting from the FTX debacle, an assessment that was promptly initiated following the crypto exchange's disheartening collapse in November 2022.
Interestingly, the investigation revealed no internal discrepancies or malpractice. However, it did uncover a strong sense of collective responsibility among the investment professionals and senior executives involved. As a result, the company decided to reduce their remuneration.
It is important to note that investing inherently comes with risks. This understanding emphasizes the importance of firms like Temasek continuing to explore innovative ventures. The failed FTX investment, while significant, constituted only a minuscule 0.09% of Temasek's extensive $293 billion portfolio at the time of FTX's cessation of operations.
The Singaporean company has consistently maintained that it conducted a thorough due diligence review prior to investing in FTX.
In a recent statement issued on May 29, Temasek's chairman, Lim Boon Heng, conveyed to Bloomberg that there was indeed deliberate deceptive activity concealed from investors, including Temasek, indicating that the fallout has had a significant impact on the firm.
Singapore's Deputy Prime Minister, Lawrence Wong, expressed similar sentiments during a parliamentary session in November 2022, a few days after FTX's collapse.
During Temasek's due diligence process, the company meticulously analyzed FTX's financial records, evaluated the regulatory risks associated with cryptocurrency market financial service providers, and sought advice from legal experts over the nine-month period from February to October 2021.
Additionally, Temasek engaged with individuals who possessed intimate knowledge of FTX's operations, including its employees, other investors, and industry participants.
