Temasek Holdings updates its charter
Temasek Holdings is one of the most high-profile investors in Asia, so changes to its charter are bound to attract attention. In Singapore, where citizens’ interests are at stake, this is up to even bigger scrutiny, though public opinions are incapable of any influence on the institution’s actions.
Temasek Charter reiterates Temasek’s focus on long-term value
The Good
This review and update ensures that the Charter remains relevant to the institution’s activities and aspirations. It also shows the institution’s ability to adjust its purpose in a changing environment. The Charter is expected to be updated when necessary.
Temasek Holdings sees itself as an investment company managed on commercial principles, and distanced its decisions from influence by the Government.
Though denied, one reason behind the change must be to avoid over scrutiny and critic of it being a sovereign wealth fund and ease complications in the institution’s investment overseas. The wordings “for the long-term benefit of Singapore” have been changed to “for its stakeholders”
It is also true to view that Temasek Holding’s main role has shifted from being a steward to the Government-linked companies to managing and growing the fund it is given by the Ministry of Finance. The role of divesting the Singapore Government’s stake in Singapore companies is no longer significant and hence removed.
I believe the Charter is meant to pave a way for Temasek Holdings to take on a role more like an asset manager while having the Government still in control over particular issues of security and interest. Talks of accepting private investors have surfaced in the media.
The Bad
Clever as it is, the attempt to clarify that Temasek Holdings is an asset management company run on commercial principles draws cynical opinions from Singaporean citizens. In saying that the relationship with the Singapore Government is a “normal institutional relationship between a company and its shareholder”, Temasek Holdings is seen as avoiding criticism from Singapore citizens of recently losses made. If indeed Temasek Holdings is to mold itself into an asset manager like any other, it will have to grapple with competition and standard practice of the market. Such includes audited reports and disclosures of management fees and remuneration.
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