Quoteworthy: "Had I been a bit more concentrated on what I was doing, I would have been able to be more thorough." — FTX founder and former CEO Sam Bankman-Fried on failing to notice signs of trouble that caused the exchange to go bankrupt.
Temasek says it has no direct exposure in cryptocurrencies following FTX writedown
Following news that Temasek Holdings will write down over US$200 million ($274 million) into cryptocurrency firm FTX before its implosion, Singapore’s state investment agency stated on Nov 17, explaining its decision to put money into the crypto firm.
According to Temasek, the reason behind its investment in FTX was to invest in a leading digital asset exchange that provides it with “protocol agnostic and market neutral exposure to crypto markets with a fee income model and no trading or balance sheet risk”.
Temasek invested US$210 million for a minority stake of around 1% in FTX International and US$65 million for a minority stake of around 1.5% in FTX US across two funding rounds from October 2021 to January.
“The cost of our investment in FTX was 0.09% of our net portfolio value of $403 billion as of March 31,” says Temasek in a Nov 17 statement, adding that it currently has no direct exposure in cryptocurrencies and that its investment in FTX was not an investment into cryptocurrencies.
See also: ECB delivers landmark rate cut but few signals top
Temasek adds it had conducted “an extensive due diligence process” on FTX. This took around eight months, from February to October 2021. “During this time, we reviewed FTX’s audited financial statement, which showed it profitable. In addition, our due diligence efforts focused on the associated regulatory risk with crypto financial market service providers, particularly licensing and regulatory compliance (that is, financial regulations, licensing, anti-money laundering (AML)/ Know Your Customer (KYC), sanctions) and cybersecurity,” says Temasek in its statement.
“Advice from external legal and cybersecurity specialists in key jurisdictions was sought, with a legal and regulatory review done for the investments,” it adds. “Post investment, we continued to engage management on business strategy and monitor performance. We recognise that while our due diligence processes may mitigate certain risks, it is not practicable to eliminate all risks.”
Referring to reports that customer assets were mishandled and misused in FTX, Temasek noted that its investment in FTX and its belief in the “actions, judgment and leadership of [FTX CEO] Sam Bankman-Fried”, which were formed from Temasek’s interactions with him and views expressed in its discussions with others, would appear to have been misplaced.
See also: ECB holds rates and signals cuts are still some way off
Looking ahead, Temasek says it continues to “recognise the potential of blockchain applications and decentralised technologies to transform sectors and create a more connected world”.
“But recent events have demonstrated what we have identified previously, the nascency of the blockchain and crypto industry and the innumerable opportunities as well as significant risks involved.” — Felicia Tan
Greening businesses and countries will take time, says Temasek CEO
Each investor must consider its mandate and what it is supposed to deliver. In the case of investment company Temasek Holdings, the mandate of long-term sustainable returns must include environmental, social and governance (ESG) considerations, says Dilhan Pillay Sandrasegara, executive director and CEO of Temasek Holdings and Temasek International.
However, he adds that greening the business models of investee companies will take time, especially for businesses in hard-to-abate sectors like aviation, power generation and the built environment.
Keeping these assets on Temasek’s balance sheet may weigh against its sustainability commitments, but Pillay believes there are long-term benefits. “The gestation that it takes to deliver the result you’re looking for in terms of return on investment — if you have a three, five or seven-year timeframe, it’s tough to do the things we’re thinking about because the timeframe to retool a business model to deliver a transition doesn’t equate with what has to be done,” says Pillay on a panel at the Bloomberg New Economy Forum on Nov 16.
Temasek has pledged to halve the net carbon emissions of its portfolio by 2030 and achieve net zero by 2050. In July, Temasek raised its internal carbon price to US$50 ($68) per tonne of carbon dioxide equivalent (tCO2e) from US$42 while announcing plans to gradually raise this figure to US$100 by the end of this decade.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
Different priorities
Sustainability reporting remains fragmented today, and Pillay stressed the need for harmonisation among these frameworks. “We need to have a taxonomy that works all around. It will take some time, and we’ll have to muddle through this issue. Each country will have to deal with what it sees as its biggest issue and how it can come up with the right outcome.”
While a common standard will allow for comparability of data, scoring companies and countries against a fixed set of metrics is unfair [scoring], he adds. “For example, people will be concerned about metrics in some of the emerging markets at this point. How will they get on the energy transition when dealing with uplifting communities and rural populations? How would you tell someone in India, Vietnam, or elsewhere: ‘You can’t use coal-fired plants.’ How are you going to get electricity to villages if you don’t have alternatives on a cost-effective basis?”
Not all data can be expressed quantitatively, and Pillay points to the interlinkages between the environmental and social pillars of sustainability. “Quite frankly, I’m not a fan of metrics regarding [social factors]. I have this internal discussion, and my ESG folks love metrics; they talk about the sustainable bond framework, putting metrics there because bots are reading it, not human beings.”
However, the figures are meaningless without explanation. “If you put that number there, you should explain the stats, so people know what you’re doing and that what you’re doing is correct. They can criticise you if they don’t think you’re doing it correctly.”
Pillay adds that intentionality is the most important factor when discussing social issues. “We focus a lot on the impact of climate, which is important, but we also have to consider the impact of communities and how they come together. If you don’t think about what’s got to happen to uplift communities, especially those in emerging markets, which are subject to the vagaries of climate change, I think that’s a big issue.”
According to Pillay, businesses must be successful in exacting a change in the world. “They have to run their business to do well to generate the cash flow to do what’s right. Now, that’s not easy to do. But it’s a journey to figure out how they will execute that plan according to the business they’re in.”
He adds: “You can only catalyse action when you can show the benefit you’re bringing to the ecosystem. Otherwise, you can go through all the other chapters [but] you’re not going to have the outcome you want to get; you’re not going to get the outcome you put your capital at risk for.”
Following news that Temasek will write down over US$200 million into cryptocurrency firm FTX before its implosion, the company says it currently has no direct exposure to cryptocurrencies and that its investment in FTX was not an investment into cryptocurrencies.
In a Nov 17 statement, Temasek says its investment in FTX provided it with “protocol agnostic and market neutral exposure to crypto markets with a fee income model and no trading or balance sheet risk”. — Jovi Ho
NoonTalk Media to list on SGX
NoonTalk Media Limited has completed its registration to list on the Catalist board of the Singapore Exchange (SGX) and targets to list on Nov 22. In a Nov 14 press release, the company says it is offering 22 million shares, of which 17.5 million are placement shares and 4.5 million are for public offering. The company expects an IPO share price of 22 cents, raising some $4.8 million.
NoonTalk Media Limited is a homegrown media entertainment company specialising in artiste and talent management, multimedia production and event conceptualisation.
The sponsor, issue manager and co-placement agent is Evolve Capital Advisory. The underwriter and co-placement agent is CGS-CIMB Securities (Singapore), while its sub-placement agents are FUTU Singapore and OCBC Securities. Applications for the public tranche can be submitted through DBS and POSB, OCBC Bank, UOB ATM and i-banking and will close at 12pm on Nov 17.
NoonTalk Media was co-founded by former DJ and actor Dasmond Koh and incorporated in April 2011. He is also the company’s controlling shareholder, executive director and CEO. The rest of the company’s directors are non-executive chairman and independent director Dr Lynda Wee, executive director and COO Jed Tay, lead independent director Soh Gim Teik and independent director, Cruz Teng.
“Our directors believe that the listing of our company and the quotation of our shares on Catalist will enhance our public image locally and overseas and enable us to raise funds from the capital markets for the expansion of our business operations,” reads the offer document released on Oct 28.
According to its financial statements, NoonTalk Media has demonstrated revenue growth for the past three years from FY2020 to FY2022, with revenue at $3.04 million, $3.83 million and $6.37 million for the FY2020, FY2021 and FY2022, respectively.
The company’s earnings, however, stood at $73,939, $189,244 and $22,407 for FY2020, FY2021 and FY2022, respectively. The plunge in earnings for the FY2022 was attributable to the lower production business segment due to its lower gross profit margin (GPM) and other factors. — Jovi Ho
