Questioning Accountability: Kenneth Jeyaretnam seeks clarity on Ho Ching's role in Temasek's FTX investment

On 17 November last year, Temasek Holdings, Singapore’s state investment firm, issued a statement to announce that it will be writing down its US$275 million into the cryptocurrency exchange FTX in light of FTX’s bankruptcy filing. Over the span of a few months, from October 2021 to January 2022, the Singapore sovereign wealth fund invested a total of US$275 million in FTX across two funding rounds. In regard to its "due diligence" prior to the investment into FTX, Temasek said it had reviewed FTX’s audited financial statement in a process which took approximately 8 months from February to October 2021, which showed it to be profitable. On Monday (29 May), the firm announced that it had cut the compensation of its senior management and the investment team responsible for the FTX deal. Temasek Chairman Lim Boon Heng disclosed that an independent team from the company had conducted a thorough internal review of the investment and presented the findings directly to the Board Risk and Sustainability Committee, as well as the board itself. “Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team, and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced,” he stated.

"Due diligence process" conducted under the leadership of Mdm Ho Ching

Temasek, in a statement at the time, attributed the blame for the investment failure to the former FTX CEO, Sam Bankman-Fried, “It is apparent from this investment that perhaps our belief in the actions, judgment and leadership of Sam Bankman-Fried, formed from our interactions with him and views expressed in our discussions with others, would appear to have been misplaced.” Mr Kenneth Jeyaretnam, Secretary-General of the Reform Party, commented on Temasek's recent decision and raised concerns about the due diligence process conducted under the leadership of Mdm Ho Ching, the former CEO of Temasek Holdings. Mdm Ho retired from her position as Executive Director and CEO of Temasek Holdings in October 2021, after nearly two decades of leadership since 2004. Mr Jeyaretnam questioned whether any of Mdm Ho's "secret compensation" had been clawed back, with his personal estimation being as much as $100 million per year. Temasek and the Singapore Government have denied such a high estimate of Mdm Ho's pay even though they declined to provide the exact amount. He emphasized that the citizens of Singapore have the right to know the details of her remuneration over the past two decades.

Mdm Ho's silence over Temasek’s due diligence process In FTX investment

It is worth noting that Mdm Ho Ching, the former CEO of Temasek, had earlier responded to the FTX collapse by stating that "Temasek can afford to be contrarian because it has its own balance sheet and can think long term." In a Facebook post in November 2022, she highlighted that some of Temasek's best investments were made by going against the grain, although she did not provide specific examples. While acknowledging that “A loss is a loss," she added, “A loss in what may turn out to be a badly managed company without adult supervision is egg on our face.” Mdm Ho, who is also the spouse of Singapore Prime Minister Lee Hsien Loong acknowledged that it does not mitigate the loss or reduce the pain by saying BlackRock or Softbank or Sequoia also invested in FTX. “With a long term stance, and all the pros and cons that come with that stance, Temasek is not fazed by the twiddles and sentiments of the market.” Mdm Ho pointed out that FTX is not a market volatility issue, and is a reminder that good intentions are not good enough. “And we need to be clear minded about the risks with FOMO too. Let’s keep calm, as we continue to tend to the fields and fry other fishes.” However, Mdm Ho did not clarify in her Facebook post whether she had direct oversight over the investment into FTX. While Temasek claims that its US$275 million investment was made across 2 funding rounds from October 2021 to January 2022, FTX itself said in a press statement that Temasek had participated in the previously announced Series B in July 2021 along with the Series B-1 fundraiser held in October 2021. If FTX's statement is accurate, it would mean that Mdm Ho Ching oversaw the initial investment into FTX before stepping down from her CEO position in October 2021, which she held since 2004.