Temasek Writes Off $275 Million Investment in FTX, Reduces Value to Zero

Singapore-based investment company Temasek has announced that it will hold the team responsible for its investment in FTX accountable by cutting their salaries. This decision comes in the wake of the company taking a $275 million impairment on FTX, reducing its value to zero. In addition, Temasek led a $200 million B+ round of financing in Amber, another crypto company that was facing bankruptcy.

Temasek, as a state-owned investor, aims to generate sustainable returns over the long term. In pursuit of this objective, the company believes in investing in new sectors and emerging technologies to better understand their impact on existing business and financial models. The investment in FTX was part of this strategy, but the company is disappointed by the outcome and the subsequent damage to its reputation.

According to Temasek, the investment team involved in the FTX decision acted in good faith and did not engage in any misconduct. However, an independent internal review was conducted to examine the investment and its repercussions. The findings of this review were presented directly to the Board Risk & Sustainability Committee and the company’s board.

While the review did not uncover any wrongdoing on the part of the investment team, Temasek’s senior management and the team responsible for the investment decision have voluntarily taken collective responsibility for the outcome. As a result, their compensation will be reduced.

Temasek’s chairman stated that the decision to cut salaries reflects the company’s commitment to accountability and transparency. The move highlights the company’s willingness to hold itself and its employees accountable for investment decisions, even when there is no evidence of misconduct.

The FTX investment has been marred by allegations of fraudulent conduct, which were acknowledged by key executives at FTX and its affiliates. Temasek, like other investors, claims that this fraudulent behavior was intentionally hidden from them. Despite this, the company remains committed to investing in new sectors and emerging technologies to adapt to a rapidly changing world.

Temasek’s chairman emphasized the importance of learning from these experiences and using them to refine the company’s investment strategies. By investing in early-stage companies, Temasek aims to stay ahead of the curve and identify potential drivers of future value.

The decision to reduce compensation sends a strong message to both Temasek employees and external stakeholders that the company is serious about taking responsibility for its investment decisions. It also serves as a reminder of the risks involved in investing in emerging sectors and technologies, and the need for thorough due diligence to mitigate these risks.

As Temasek continues its journey as a major global investor, this incident will undoubtedly shape its future investment strategies and risk management practices. By holding itself accountable and adapting to changing market dynamics, the company aims to regain investor confidence and maintain its position as a leading player in the investment landscape.

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