Singaporean investment firm Temasek Holdings has cut the compensation of executives responsible for the company's investment in the now-defunct FTX cryptocurrency exchange.
Temasek was once the second-largest outside investor in FTX, holding 7 million shares, according to Forbes. However, the company was forced to answer for its investment play after the exchange collapsed.
According to a May 29 statement, Temasek has now completed an internal review of FTX's $275 million in investment losses, which it began shortly after the stock market collapsed in November 2022.
While the findings revealed that internally "there was no misconduct," it was reported that both the investment team and senior management took "collective responsibility" and their compensation was reduced.
It noted that while any investment has inherent risks, it is important for Temasek to continue to invest in new innovations:
"We believe we need to invest in new sectors and emerging technologies to understand how these areas can impact the business and financial models of our current portfolio and whether they will drive future value in an ever-changing world. "
The $275 million FTX investment, which has now been written off, was said to represent just 0.09% of Temasek's portfolio value of more than $293 billion at the time of the collapse.
Temasek has stood by its claims that it conducted extensive due diligence on FTX before making the investment.
Temasek's chairman, Lim Boon Heng, told Bloomberg in a statement on May 29 , that "the fraudulent conduct was deliberately concealed from investors, including Temasek," suggesting it had a major impact on the company:
"We are disappointed with the outcome of our investment and the negative impact on our reputation."
Singapore's Deputy Prime Minister Lawrence Wong echoed similar sentiments at a parliamentary meeting in November 2022, just days after FTX's collapse.
"What happened to FTX has therefore caused not only financial losses for Temasek, but also a loss of reputation," - Wong said.
Temasek said that in conducting due diligence, it reviewed FTX's financial statements, assessed regulatory risks with financial service providers in the cryptocurrency market and sought legal advice during the nine months from February to October 2021.
It added that the company also engaged with individuals with first-hand knowledge of FTX, including employees, other investors and industry participants.
