Temasek Holdings is an investment company that is owned by the government of Singapore. With a international staff of more than 300 people, it manages a portfolio of about S$185 billion, or more than US$127 billion, focused primarily in Asia. It is an active shareholder and investor in such sectors as banking & financial services, real estate, transportation & logistics, infrastructure, telecommunications & media, bioscience & healthcare, education, consumer & lifestyle, engineering & technology, as well as energy & resources. It has a corporate credit rating of AAA/Aaa by Standard & Poor's and Moody's respectively.[1]
In the early 1960s, the Singapore government took stakes in a variety of local companies, in sectors such as manufacturing and shipbuilding. Prior to the incorporation of Temasek Holdings in 1974, these stakes were held by the Ministry of Finance (the Ministry remains Temasek's sole shareholder). Its inital portfolio was just over US$100 million.
In addition to Temasek, the Government of Singapore has another investment arm, the Government Investment Corporation (GIC), which invests primarily the government's foreign reserves.
Ho Ching was appointed executive director of Temasek Holdings in 2002. She is the second wife of Lee Hsien Loong, who became Prime Minister of Singapore in 2004.
On 5 March 2008, Simon Israel, Temasek Holdings’ executive director, appeared in the US House of Representatives before a joint sub-committee of the House Financial Services Committee in a hearing related to foreign government investments in the United States[2].
The company announced in 2008 that it is not a sovereign wealth fund, with its spokesman saying the company "has to sell assets to raise cash for new investments and doesn't require the government to give approvals"[3]. Temasek was excluded from an agreement between Singapore and the United States requiring greater disclosure and transparency in transactions involving sovereign wealth funds, which included the Government of Singapore Investment Corporation (GIC), claiming it "already meets disclosure guidelines" and provides more details than sovereign wealth funds.
In Jan 2008, The Economist reported that Morgan Stanley had estimated the fund's assets at US$159.2 billion[4].
As of 2004, it owns stakes in many large foreign companies, including Standard Chartered, Merrill Lynch, China Construction Bank, Global Crossing, as well as many of Singapore's largest companies, such as SingTel, DBS Bank, Singapore Airlines, PSA International, SMRT Corporation, Singapore Power and Neptune Orient Lines. It also holds investments in public icons like the Raffles Hotel and the Singapore Zoo. It also holds a stake in Singapore Pools, the only legal betting company in Singapore. On October 14, 2004, it announced that it was closing the operational headquarters of Singapore Technologies and transferring the latter's assets to itself.
About half of its managed assets are external to Singapore and Temasek-linked companies (TLCs) also hold an extensive global portfolio, such as SingTel's ownership of Australian telco Optus, and Singapore Airlines' 49% stake in Virgin Atlantic.
Although 75% of Temasek's holdings is in Singapore, it has set a target of eventually reducing this to only one-third. Another one-third will be in developed markets and the final third is planned for investment in developing economies.
Temasek Holdings's total shareholder return since inception more than 30 years ago is more than 18% compounded annually.[5]
Temasek is an arm of the Singapore government and owned 100% by the Ministry of Finance, and these close links to the government have on several occasions caused protests in foreign countries.
When ST Telmedia, a TLC, took a significant stake in Indonesian Indosat, workers went on strike to protest working for Singapore. In 2003, when ST Telemedia acquired a two-third share of computer networking telco Global Crossing, the acquisition had to be approved by the U.S. government to ensure a foreign government did not control the extensive network. Moreover, it is said that Temasek has been trying to take control of major competitors in other countries for the sake of Singapore's economy.
Temasek's 2006 acquisition of Shin Corporation, owned by the family of then Thai prime minister Thaksin Shinawatra, was particularly controversial, with protestors burning effigies of Lee and Ho in the streets of Bangkok.[6] The deal was a factor in exacerbating the Thai political crisis, which eventually led to the downfall of Thaksin and a review of the transaction's legality. The military junta that overthrew Thaksin later forced Temasek to divest the majority of its investment in Shin Corp.[7]
Temasek is cited by journalist Eric Ellis as being central to the Singaporean support for the Burmese military dictatorship.[8] However, Singapore's High Commissioner to Australia has issued a response denying these claims.[9]
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