Temasek cuts staff pay after failed FTX crypto investment

Singapore-based investment company Temasek has announced that its investment team and senior management experienced a reduction in compensation following the firm’s failed investment in cryptocurrency company FTX. Temasek Chairman Lim Boon Heng stated that despite no misconduct by the investment team, they took collective accountability for the outcome.

In November, Temasek Holdings revealed that it would write down its US$275 million investment in FTX. This decision came after the collapse of FTX, which had been accused of fraudulent conduct that was intentionally hidden from investors, including Temasek.

An independent team conducted an internal review of the investment, presenting its findings to both the Board Risk & Sustainability Committee and the company’s board. The statement from Temasek did not specify the extent of the compensation cuts or the number of staff affected by the decision.

Temasek had invested a total of US$210 million in FTX International for a minority stake of around 1%, and US$65 million for a minority stake of approximately 1.5% in FTX US. The investments spanned two funding rounds from October 2021 to January this year.

Lim Boon Heng emphasised that Temasek aims to deliver sustainable returns over the long term, acknowledging the inherent risks involved in investing. He explained that the company invests in new sectors and emerging technologies to understand their potential impact on existing portfolio businesses and whether they may drive future value in a constantly changing world, reports Channel News Asia.

At the end of last year, FTX, the American crypto exchange, filed for Chapter 11 bankruptcy after experiencing several tumultuous days due to a failed buyout. The founder and CEO, Sam Bankman-Fried, announced his formal resignation the day before, which has left the world of cryptocurrency in a state of shock following the collapse of the second-largest exchange.