On Monday, Singapore state investor Temasek Holdings said it had cut compensation for the team recommended its investment in the now-bankrupt FTX cryptocurrency exchange, as well as for its senior management team.
The move comes about six months after Temasek conducted an internal review of its FTX investment, which resulted in a writedown of $275 million.
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 responsibility and had their compensation reduced, said Lim Boon Heng, chairman of Temasek.
Temasek did not disclose the amount of compensation cut.
Temasek said its investment cost in FTX was 0.09% of its net portfolio value of S $403 billion (304 billion dollars) as of March 31, 2022, and that it currently had no direct exposure to cryptocurrencies.
Temasek also said last year that it conducted extensive due diligence on FTX, with its audited financial statement then showing it to be profitable. FTX's other backers such as SoftBank Group Corp's Vision Fund and Sequoia Capital had also marked down their investment to zero after FTX filed for bankruptcy protection in the U.S. last year.
In the statement, Lim said, there was fraudulent conduct intentionally hidden from investors, including Temasek, as alleged by prosecutors and key executives at FTX and its affiliates. We are disappointed with the outcome of our investment, and the negative impact on our reputation. Temasek's goal is to deliver sustainable returns over the long term by investing in early-stage companies, Lim said.
While there are inherent risks when we invest, we believe that we have to invest in new sectors and emerging technologies to understand how these areas may impact the business and financial models of our existing portfolio, and whether they would be drivers of future value in an ever-changing world.