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Singapore, Temasek and Disclosure

26 Aug 2009

Your editorial "Temasek and Transparency III" (Review & Outlook, Aug. 20) makes unfounded claims on disclosure regarding Temasek.

The government takes a principled approach in what it discloses on Temasek, not merely "what it deems acceptable." It discloses all relevant information that Singaporeans need to judge Temasek's performance as a long-term investor, favorable or otherwise. But it does not believe that either government or parliament should become engaged in Temasek's investment strategies or internal governance. This would politicize Temasek's operations and prevent it from managing its portfolio professionally and sustaining good, long-term performance.

Temasek itself discloses well beyond what it is required to under the law. It publishes annually its total shareholder returns over various time horizons from one to 30 years and since its inception in 1974, as well as the value of its portfolio for each year since inception. It also publishes the group's financial summary including profit and loss statements and balance sheets. Temasek's accounts are audited by reputable international auditors.

You cited Temasek's losses since March last year as warranting greater scrutiny by parliament but omitted other facts disclosed by the government in parliament that while Temasek's portfolio value had fallen in line with the recent market decline, its annualized returns of 15% (in U.S. dollar terms and excluding capital injections) from the start of the market cycle in 2003 until the trough in November 2008 exceeded relevant market indices, as well as many comparable investment entities internationally.

On Charles Goodyear, what Temasek stated about the mutual agreement not to proceed with the planned CEO succession is no different from typical disclosure by large companies which make senior management changes.

Your editorial also gave the misimpression that the government did not favor a non-Singaporean as CEO of Temasek. As the finance minister told parliament, while it is ideal to have a Singaporean, this is not always possible, as the field of candidates with experience in running international operations is narrow. This is why the government wants Temasek to get the best person for the job and accepted the Temasek board's decision to appoint Mr. Goodyear, a non-Singaporean, as CEO-designate.