Open letter: Did Temasek invest Singapore reserves in ‘highly speculative’ companies with due diligence?

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Below is an open letter sent by a member of the public, Jeffery Ho, to the President of Singapore, Mdm Halimah Yacob, on November 13 via his official email.

Dear President Halimah,

It is distressing to read about Temasek’s failed investment in FTX. I read that Temasek participated in all 3 FTX funding rounds.

Should Singapore SWFs (including Temasek) invest in companies/funds whose “business model and underlying assets are highly speculative in nature” than a “large financial institution” wisely avoided*?.

Has full and proper due diligence been performed?

As President, I understand that you have a responsibility to protect Singapore’s reserves, so I hope you will investigate (hopefully before your current term ends next year) how Temasek managed to lose so much our hard-earned reserves (in the hundreds of millions of Singapore dollars). as reported?).

Although FTX is a done deal and probably canceled entirely, I hope something can be done to prevent such risky and highly speculative investments by our sovereign wealth funds involving Singapore reserves in the future.

Thank you for protecting Singapore’s reserves.


* Financial Times, (November 12, 2022):

a senior executive at a major financial institution said his company even briefly debated buying FTX as part of an internal campaign to “grow crypto.” But the idea was discarded due to “the highly speculative nature of the business model and the underlying assets”, he added.

“When Bravo and a partner Tre Sayle began the due diligence for the funding round, they were surprised by FTX’s numbers. The two-year-old startup run by a relatively small team of young traders was on course to win. more than $200 million in operating profit for the year, unprecedented margins for a growth start-up company that would normally lose money Bravo was blown away Thoma Bravo invested more than $125 million dollars in the funding round in June 2021, becoming one of FTX’s largest backers.

Thoma Bravo is just one of a number of blue chip investors, including Singaporean state fund Temasek, Tiger Global and the Ontario Teachers’ Pension Plan, whose backing has helped give credibility to Bankman-Fried’s business empire before its sudden collapse this week, driven by concerns. on his ties to his proprietary business group Alameda Research…

“These investors will face tough questions from their own clients about how they got it so wrong, why they didn’t apply for FTX board seats, and whether they really understood. how the company made money…

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