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IN HIS letter 'Watch out for fallout from Temasek's move' (ST, Feb 10), Mr Quek Soo Beng said political risks should be considered and asked about the Government's role in the 'approval process' for Temasek Holdings investments. I wish to assure Mr Quek that Temasek has a comprehensive risk management framework to help guide its investments.

This framework addresses all major categories of investment risk including market, credit, regulatory, operational and political risk. Temasek does consider political risk in deciding whether to take up investment opportunities.

As shareholder, the Government's role is to ensure that Temasek has in place a competent board of directors to guide its investments and a clear set of processes to ensure accountability and rigour in its investment decisions. The Government does not approve individual investments by Temasek, nor does it second guess Temasek's risk assessments. These are business decisions for Temasek to take. The Government holds Temasek accountable for delivering a good rate of return on the overall investment portfolio.

DAMIEN TAN
DIRECTOR (GOVERNANCE & INVESTMENT)
MINISTRY OF FINANCE