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Temasek Cannot Divest Stakes in GLCs Overnight



According to the press release, “We refer to Mak Yuen Teen’s letter “Cut the knot of government ownership of GLCs” (ST, 2 May 00), and thank him for his comments.

GLCs are products of history

2 As Mr Mak has rightly pointed out, the original purpose behind the government’s involvement in business was to accelerate Singapore’s economic development by initiating industrialisation in the early 1960s. At that time, the government moved into areas such as steel making, shiprepair and petrochemicals etc, industries where the private sector did not want to enter and assume all the risks. Temasek Holdings was formed in 1974 to hold and manage all such government investments.

3 In the 1980s, Temasek began a process to divest its investments in companies that could stand on their own and were no longer of national or strategic importance. Our stakes in many companies have been reduced significantly. Some were divested completely. Please see Table 1 for some examples.

4 While we agree that the times have changed and there are no compelling reasons for the Government to hold controlling stakes in the GLCs, we cannot divest our stakes in the GLCs overnight. We have to wait for the right time to get the right price. In the meantime, we will vote our shares where necessary to enhance the value of our investments. We will be abdicating from our role if we step aside and not support proposals which make commercial sense.

Appointment of Board of Directors

5 Contrary to popular belief, Temasek only appoints the number of directors to the listed GLC Boards proportional to its shareholding level. We believe that each Board should have a good mix of directors so that there is a right complement of expertise. Temasek therefore also nominates private sector directors to the GLC Boards.

6 The proportion of directors from the public sector on the Boards of our listed GLCs is actually very small. For an average board size of 9 directors, the average number of public sector directors is two.

GLCs do not receive special privileges

7 While GLCs may be perceived to have better credit risks than non-GLCs when it comes to raising loans, Temasek GLCs are expected to raise the funds they need on commercial terms. Financial institutions that deal with the Temasek GLCs will have to make their independent assessment with no reference to Temasek or Government.

8 Like any shareholder, Temasek expects its companies to be profitable and to give a good rate of return on investment. However, we will divest or liquidate a GLC if it continuously performs poorly, for example, Construction Technology (the company was sold at a loss in 1996) and Micropolis (the company was liquidated in 1997).

GLCs are commercial entities

9 We wish to reiterate that Temasek GLCs operate like any private sector company on a commercial basis. The performance of our GLCs should be judged by the strength of their boards and management, and not on who their shareholders are. We also do not want to see our GLCs compete unfairly with the smaller local firms, and hence have constantly encouraged our GLCs to seek new business opportunities overseas.

10 Finally, Mr Mak quoted that a recent conference in Beijing concluded that “the state is a lousy owner”. However, we would like to point out that every country is unique. What works in one country may not work in another, and vice versa. Our major GLCs have generally performed well and gained regional recognition for their business performance and management. Temasek will ensure that its GLCs will not become complacent, but maintain their competitive edge and become more innovative and entrepreneurial in their outlook.

11 We would like to assure Mr Mak that Temasek constantly reviews its shareholdings in its GLCs to see whether there should be further reduction.

Yours sincerely


Source: Temasek Holdings Press Release

Ascendas-Singbridge Acquires Three Hotels in Osaka



Singapore’s Ascendas-Singbridge has acquired three hotels in Osaka for 10.29 billion JPY to tap tourism growth in Japan’s third-largest city.

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BlackRock Contemplates Stake in Eurizon



Asset management giant BlackRock is contemplating purchasing a 30% ownership stake in Intesa SanPaolo’s asset management unit called Eurizon Capital SGR S.p.A. BlackRock is keen on growing its technology business and increase market adoption of its Aladdin platform.

Intesa has been working with UBS to seek out strategic options for Eurizon. Intesa is keen on maintaining control over Eurizon.

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SWFI First Read, June 22, 2018



JPMorgan Fund Buys 40% of Oxford Properties’ French Portfolio

A fund advised by JP Morgan Asset Management committed €400 million in Oxford Properties’ French portfolio. Essentially, Oxford Properties sold a 49.9% non-managing interest in 32 Rue Blanche, 92 Avenue de France and Paris Bastille. Oxford Properties made its maiden investment in Paris in 2014 when it acquired 32 Rue Blanche.

Oxford Properties is the real estate unit of OMERS.

Temasek Explores Further Cash Commitments to FirstCry

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