Singaporean investment firm Temasek Holdings has taken a controversial move, reducing the compensation of its senior management and the investment team involved with FTX dealings, despite no misconduct being found by an internal review. According to a recent statement, this decision was made as the company’s management took “collective accountability” following the unpleasant aftermath of its investment in the cryptocurrency business.
Last year, Temasek wrote down its $275 million investment in FTX after the company went through a major meltdown. The investment occurred as FTX announced plans to go public via a special purpose acquisition company (SPAC) deal in the United States. However, the deal was halted over concerns about FTX’s business model. It is worth noting that Temasek had declared performing extensive due diligence on the exchange before making its investment. As of March 31, 2022, its cost of investment in FTX was only 0.09% of its net portfolio value of S$403 billion ($304 billion).
Questions may arise regarding Temasek’s decision to penalize its management and investment team despite the absence of misconduct. Particularly when considering that the company, one of Asia’s largest investors with a portfolio exceeding $300 billion, has made successful investments in major businesses like Alibaba, Tencent, and Zoom.
On the other side, FTX has not entirely lost faith from investors and the market. The platform is reportedly considering a reboot after successfully recovering over $7.3 billion in cash and liquid crypto assets. Tribe Capital, a venture firm, is even rumored to show interest in leading a $250 million fundraising effort for the relaunched platform, demonstrating that some still believe in FTX’s potential.
However, despite recent potential advancements, the legal battles surrounding FTX continue. Sam Bankman-Fried, the company’s founder, has recently asked a New York federal judge to dismiss a majority of the criminal charges brought against him by federal prosecutors, arguing that they were “dramatic” and converted “civil and regulatory issues into federal crimes.” In addition, the US Internal Revenue Service (IRS) has filed tax claims worth a mind-blowing $44 billion against FTX and its affiliates.
Given Temasek’s reputation and experience in the global investment landscape, some may question its decision to punish its management and investment team in the absence of proven misconduct. This move might spark discussions about corporate accountability and fairness, especially when the senior team was not directly involved in the misfortunes of their investment.
Source: Cryptonews
