Singapore's state investor, Temasek Holdings, announced on Monday that it had reduced compensation for the team responsible for recommending its ill-fated investment in the now-defunct FTX cryptocurrency exchange, as well as its senior management team.
This decision follows a six-month internal review initiated by Temasek after the investment in FTX resulted in a substantial writedown of $275 million.
In a statement posted on Temasek's website, Chairman Lim Boon Heng clarified that while the investment team had not engaged in any misconduct when making the investment recommendation, both the investment team and senior management, who ultimately bear responsibility for investment decisions, took collective accountability and accepted reduced compensation.
The exact amount of the compensation cut was not disclosed by Temasek.
Temasek had previously stated that its investment cost in FTX represented a mere 0.09% of its net portfolio value of 403 billion Singaporean dollars ($304 billion) as of March 31, 2022. Furthermore, the company emphasized that it currently holds no direct exposure to cryptocurrencies.
Last year, Temasek had asserted that it had conducted extensive due diligence on FTX, and the exchange's audited financial statement at the time demonstrated profitability.
Following FTX's bankruptcy protection filing in the United States last year, other backers of the exchange, including SoftBank's Vision Fund and Sequoia Capital, also wrote off their investments down to zero.
Chairman Lim stated in the Monday statement, "There was fraudulent conduct intentionally hidden from investors, including Temasek, as alleged by prosecutors and admitted by key executives at FTX and its affiliates. Nevertheless, we are disappointed with the outcome of our investment and the negative impact on our reputation."
Temasek's overarching objective is to achieve sustainable returns in the long term by investing in early-stage companies, according to Chairman Lim.
"While there are inherent risks associated with investing, we believe that venturing into new sectors and emerging technologies is necessary to understand their potential impact on the business and financial models of our existing portfolio. This enables us to determine whether they can drive future value in an ever-changing world," Lim added.
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