Loans by GIC and Temasek Holdings

Parliamentary Question by Mr Leon Perera:

To ask the Deputy Prime Minister and Minister for Finance (a) whether the Government is involved in, or prescribes any rules for, loans being given by Temasek Holdings, GIC or their subsidiary companies to large corporations or other kinds of entities; (b) if so, how much of these loans are made to companies which Temasek Holdings or GIC has existing investments in compared to other entities which they do not have existing investments in; and (c) whether the President's concurrence is required for the extension of loans by GIC or Temasek Holdings that are above a certain proportion of their total assets.

Parliamentary Reply by Second Minister for Finance Ms Indranee Rajah:

GIC and Temasek invest using a variety of instruments, including equity and debt. There is a range of debt instruments, including bonds and loans, with different structures (such as a mezzanine or preferred instrument) depending on the capital structure of the investee company.

GIC and Temasek can and do provide loans, where the loans are provided in the investment context. However, they do not provide the same loans as banks or finance companies do, that is to say, they do not provide mortgage loans or working capital loans which banks provide.  

The Government does not direct GIC’s and Temasek’s individual investment decisions, including decisions as to whether, when or in whom to invest in a loan. President’s concurrence is not needed for investment decisions by GIC or Temasek. Instead, the Government holds the Boards of GIC and Temasek accountable for their overall performance. The Government ensures that GIC and Temasek have competent Boards, and such appointments are subject to President’s concurrence.