Wednesday, April 02, 2008

Apparent Lack of Coordination Between Temasek and Ministry of Finance is Alarming

[I just sent this letter to ST Forum. It is about an issue I blogged about earlier, see for background information. If this letter doesn't get published, at least a few people who care to read my blog will get to see it]

I am disturbed by recent events (“Disclosure Deal,” ST March 22 and “Guidelines for wealth funds apply to Temasek, says ministry,” ST April 01) that suggest a lack of coordination between Temasek Holdings and the Ministry of Finance.

This issue is not just a matter of definitions and of whether Temasek is a Sovereign Wealth Fund. Rather, it suggests that for at least a brief week and a half, Temasek was a corporate entity that was able to decide on its principles of corporate governance, ahead and independently of its sole shareholder and owner, the Government of Singapore.

Temasek’s corporate governance framework has implications that go far beyond standards of financial disclosure, into the realm of critical issues such as Temasek’s investment mandate and the decision-making process that Temasek uses to make or dispose of investments. These issues, amongst others, have as great an impact on allaying foreign suspicion and lowering the risk of protectionist measures, as the levels of disclosure adopted by Temasek.

The process of determining a company’s principles of corporate governance is a principal issue for every corporation, particularly a company like Temasek that invests its funds on behalf of the country. Thus, I certainly hope that the two contradicting statements to the press were the result of an honest miscommunication between the two parties, and that my concerns are misplaced.


I had also previously written a letter to the press last year in March 07 about Temasek & the MoF.

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