FTX not the first time Temasek people have ‘misplaced belief’ in investments – The Online Citizen Asia

Source: Bloomberg

It was earlier reported that Martin Fichtner, Managing Director and Deputy Head of Technology & Consumer at Temasek was quite bullish in his outlook when asked about Temasek Holdings’ view about the impact on the valuation of crypto companies like FTX during the present market downturn. He was speaking to reporters at a Temasek’s media conference in July this year.

Replying to the journalists, Fichtner said, “We feel strongly about the companies in our portfolio performing well over time and we’ll see cycles in terms of multiples go up and down as the cycles occur.”

Fichtner’s statement came just 4 months before the FTX crashed spectacularly resulting in the company filing for bankruptcy last month.

The Chief Investment Officer of Temasek is Rohit Sipahimalani. According to his LinkedIn profile, Sipahimalani graduated with B.A. in Economics at St. Stephen’s College based in Delhi. He later obtained an MBA from the Indian Institute of Management in Ahmedabad of India.

‘Misplaced belief’

Temasek reportedly took eight months, from February to October 2021, to do its thorough due diligence before investing in FTX.

When FTX went bankrupt last month, Temasek quickly issued a statement blaming FTX CEO Sam Bankman-Fried, “It is apparent from this investment that perhaps our belief in the actions, judgment and leadership of Sam Bankman-Fried, formed from our interactions with him and views expressed in our discussions with others, would appear to have been misplaced.”

In a filing to Delaware bankruptcy court, John J. Ray III, the new FTX CEO who replaced Bankman-Fried, issued a scathing assessment of “unprecedented” poor management practices by his predecessor and listed a series of questionable and fraudulent financial activities in his filing.

Prior to the collapse of FTX, Bankman-Fried snapped up 19 properties worth US$121M before his crypto empire fell, including a US$16M vacation home for his Stanford University law professor parents.

Ray only took one week to discover the various problems in FTX when Temasek’s team could not in eight months. It’s not known if Fichtner or Sipahimalani was involved in the due diligence process before investing in FTX.

Temasek’s general counsel misplaces her belief in nickel trading

This is not the first time that people from Temasek have “misplaced” their beliefs in various investments. In March this year, businessman Ng Yu Zhi, accused of cheating investors in a US$1.1 billion nickel trading fraud, was slapped with fresh charges, bringing the total number to more than 100.

Ng, who is the director of Envy Asset Management (EAM) and Envy Global Trading (EGT), promised varying returns averaging 15 per cent over three months to investors, some of whom were high-profile individuals. These investors, greedy of the high returns, believed in Ng and gave him large sums of money to trade in nickel.

Between October 2017 and February 2021, Ng’s two companies raised at least US$1 billion for the purported sale and purchase of nickel, which allegedly did not take place. Instead, he allegedly splurged the monies on himself, transferring millions into his own pocket instead, buying luxury cars, insurance policies, properties and shares while other funds were sent to foreign bank accounts. He was said to have led a lavish lifestyle.

One of those high-profile individuals allegedly invested in Ng’s nickel trading scheme is Ms Pek Siok Lan, the general counsel for Temasek. She was allegedly conned into investing S$5.5 million to Envy Global Trading for four receivables purchase agreements between October 2020 and January 2021.

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