Temasek Holdings and Ng Yat Chung

This article was in the news about a week ago:

July 5, 2007
Ex-defence chief Ng Yat Chung joins Temasek
By Bryan Lee

FORMER defence chief Ng Yat Chung has joined the senior management of Singapore investment company Temasek Holdings.

Lieutenant-General Ng, 46, took up the position of portfolio management managing director on Sunday - a newly created role, The Straits Times understands.

Temasek confirmed the appointment on Tuesday but declined to provide further details.

The appointment comes less than four months after Lt-Gen Ng stepped down as Chief of Defence Force and handed the baton to then Major-General Desmond Kuek.

It mirrors similar movements of other military leaders to civilian positions. Lt-Gen Ng's predecessor, Lt-Gen Lim Chuan Poh, for example, is the chairman of the Agency for Science, Technology and Research.

A career soldier since 1979, Lt-Gen Ng was awarded the Singapore Armed Forces (SAF) Overseas Scholarship in 1980 and has since held many key command and staff positions.

Before taking the helm of the SAF in 2003, he was Chief of Army. He has also served as director for joint operations and planning and Chief of Staff (Joint Staff).

During his four years at the head of the SAF, Lt-Gen Ng was credited with improving the SAF's operational readiness and steering it into the next generation.

Outside the military, he is a member of the board of trustees at the National University of Singapore, chairing its campus planning and development committee.

Lt-Gen Ng is a Cambridge University graduate, has an MBA from Stanford University and recently completed the Advanced Management Programme at Harvard University.

At first glance, the appointment of the ex-Chief of Defense Force to a portfolio management role is puzzling. Commercial investment houses usually do not recruit people from the military straight into a portfolio management role. In fact, we would probably expect to see a stock sell-off in the market of a company like Legg Mason or Templeton if they were to suddenly hire a U.S. army general into the upper echelons of their management team. Being involved in portfolio management requires intuition and judgment built up over several years of commercial experience - there is simply no substitute for feeling the pain of making mistakes and the emotional ups and downs of markets.

However, Temasek is not a typical investment company - I hope Ms Myrna Thomas understands that by now. It manages the Singapore government's investments, and as such represents part of the nation's interests. As seen in the recent Shin Saga, Temasek would have benefited if it had someone who had a strong understanding of the political landscape in the neighbouring region, someone who could have anticipated potential military reaction to politically-linked transnational acquisitions.

If Temasek continues to pursue large sized acquisitions in neighbouring Southeast Asian countries (which it probably will), an astute political and military analyst will help to contribute to the political due diligence that seems to have become an intrinsic prerequisite to political risk management in Temasek's investment process. Furthermore, someone who is known at the highest military levels will help Temasek to weave through the negotiations between the company and the Thai military government.

Who else fits the bill but LG Ng Yat Chung? Nevermind the fact that he would never get a similar position in the commercial world, much as I dislike the lack of transparency in Temasek, I think this is not a bad acquisition of talent by Singapore's state-owned investment company.

However, Ho Ching has to maintain control over the final commercial decision making; LG Ng can only be expected to take on primarily an advisory role, at least for now. Allowing the General a free hand in portfolio management before he gains the requisite experience can amount to taking unwarranted risks with the nation's assets.