How GIC and Temasek are managing your money

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CHINESE property developer Guangzhou R&F Properties said ....

...... in a filing that the petition would not have any meaningful impact on its business.
It said the loan was pledged over a unit indirectly holding 68 hotels and one office building in China, and a secured creditor could enforce the collateral ....

lie flat, super bochap.

 

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DBS unit fined $1.7m in Hong Kong for anti-money laundering breach​

The lapses at the bank took place during periods between April 2012 and April 2019. PHOTO: REUTERS

Jul 07, 2024

DBS Group Holdings’ Hong Kong unit was fined HK$10 million ($1.73 million) by Hong Kong’s regulator for lapses in adhering to anti-money laundering and counter-terrorist financing regulations.
The disciplinary action follows an investigation by the Hong Kong Monetary Authority (HKMA) of DBS Hong Kong’s systems and controls for compliance, the regulator said in a statement.
The lapses took place during periods between April 2012 and April 2019.
A DBS Hong Kong spokesperson said the bank takes its anti-money laundering obligations seriously and accepts HKMA’s decision, calling the issues at hand “sporadic and historical in nature”.
Over the years, the Hong Kong unit has implemented new group policies and its actions have improved its capabilities to detect and mitigate money laundering risks, the spokesperson added.
The fine, while small, will be another stain for Singapore’s largest bank, which is among lenders ensnared in a money laundering scandal in the city.
More than $3 billion of assets have been frozen or seized by the police in this case, and DBS Bank had significant exposure through funds held in its accounts and loans made.

The Hong Kong authorities identified a failure to continuously monitor business relationships and conduct enhanced due diligence in high-risk situations.
The bank also failed to keep records on some customers, the regulator said.
This included failing to obtain copies of identity documents of 609 authorisers for Ideal, a corporate internet banking service provided by the bank.
No identity verification was conducted against these authorisers from April 2012 to July 2017, according to HKMA.
The bank also failed to take “reasonable measures” to establish the source of wealth of high-risk customers to mitigate money laundering or terrorist financing in the business relationships of 15 customers, the regulator said.
“The HKMA requires banks to put in place effective customer due diligence measures to combat money laundering and terrorist financing,” said Mr Raymond Chan, executive director of HKMA. BLOOMBERG

 

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Singtel unit Optus to defend proceedings by Australian authorities over 2022 cyber attack​

Optus said that at this stage, it was unable to determine the quantum of penalties, if any, that could arise from the proceedings. PHOTO: REUTERS
Michelle Zhu

Jun 14, 2024

SINGAPORE - Singtel’s Australian unit Optus Mobile has reiterated its intention to defend proceedings filed by the Australian Communications and Media Authority (Acma) over a 2022 cyber attack faced by Optus.
On June 14, Optus said it was aware of only about 10,200 customers having their personal information published on the internet due to the cyber attack.
This is opposed to Acma’s claim alleging 3.6 million breaches of the Australian Telecommunications (Interception and Access) Act.
Optus said that at this stage, it was unable to determine the quantum of penalties, if any, that could arise from the Australian media watchdog’s proceedings.
“That is ultimately a matter for the Federal Court to determine,” said the Australian carrier.
“If a contravention is found, the court will consider a number of factors and apply a penalty amount it determines overall as appropriate based on the events that occurred. It is not necessarily a direct calculation based on the number of contraventions.”
Optus added that it has taken “significant steps”, including working with the police and other authorities, to mitigate potential harm to its customers affected by the 2022 cyber attack.

The telco previously announced on May 22 that Acma had filed proceedings relating to the cyber attack on the basis that Optus had failed to protect the confidentiality of personally identifiable information of its customers from unauthorised interference, or unauthorised access. Optus said it intended to defend these proceedings.
Earlier in March, the Singtel unit was fined A$1.5 million (S$1.3 million) by Acma for breaching public safety rules after it failed to upload data via its outsourced supplier, Prvidr, to the Integrated Public Number Database.
Shares of Singtel were trading one cent, or 0.4 per cent, higher at $2.57 on a cum-dividend basis as at 9.27am on June 14, after the news. THE BUSINESS TIMES

 

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MAS, CAD probing Seatrium over potential offences relating to Brazil corruption case​

The offences were potentially committed by the company and/or its officers when it was then Sembcorp Marine, before its renaming in 2023 after the merger with Keppel Offshore & Marine. PHOTO: SEATRIUM

Ovais Subhani
Senior Business Correspondent

Jun 17, 2024

SINGAPORE - The Singapore authorities are conducting a joint investigation into offences potentially committed by Seatrium, formerly Sembcorp Marine, relating to a massive and long-running corruption case in Brazil, dubbed Operation Car Wash.
The Monetary Authority of Singapore and the Singapore police’s Commercial Affairs Department have requested further information from the company for the purpose of the investigations, Seatrium said in a filing with the Singapore Exchange (SGX) on June 15.
The offences were potentially committed by the company and/or its officers when it was Sembcorp Marine, before its renaming in 2023 after the merger with Keppel Offshore & Marine.
They fall under the Securities and Futures Act 2001, the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992, and all previous versions of those laws.
Seatrium said it continues to provide its full cooperation to the Singapore authorities.
The company will continue to monitor the situation and make appropriate announcements in the event of any material developments. In the meantime, shareholders and potential investors are advised to exercise caution when dealing in its shares.
Seatrium shares closed down 1.77 per cent at $1.67 on June 14.

The company announced in March that Singapore’s Attorney-General’s Chambers (AGC) was agreeable to entering a deferred prosecution agreement with Seatrium following the alleged corruption offences in Brazil.
Seatrium said the agreement is not definitive yet and is subject to the AGC’s agreement and the approval of Singapore’s High Court.
In March, Seatrium was fined US$110 million (S$149 million) in connection with the alleged corruption offences in Brazil dating back some 15 years.
However, the AGC took into consideration what the group would have to pay the Brazilian authorities as part of that total amount. Seatrium, hence, only paid the remaining US$57 million to the Singapore authorities.
Additionally, two former executives of the group were charged with corruption offences on March 28 for allegedly paying bribes of more than $20 million to further the company’s business interests in Brazil.
The offshore and marine energy engineering company in February posted a $1.68 billion net loss for the second half of its 2023 financial year, a more than tenfold increase from the $118.3 million loss for financial year 2022.

 

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GIC lost 62% on this investment.

GIC sells stake in UK mall for GBP120 mil​

Nur Hikmah Md Ali
Tue, 2 Jul 2024

Bluewater is the fifth largest mall in London, UK (Photo: Bluewater)

SINGAPORE (EDGEPROP) - Singaporean sovereign fund GIC has sold its 17.5% stake in the Bluewater shopping centre in the UK for GBP120 million ($206 million) to Land Securities Group (Landsec), a London-based commercial property development and investment company.

The fund was reported by Mingtiandi to have taken a 62% haircut on its investment into Bluewater. It had acquired its stake in the mall in 2005 from the property investing unit of Prudential, now M&G Real Estate, for GBP318 million.

Bluewater is the fifth largest mall in London, UK. It spans a floor area of 1.8 million sq ft across three levels. The mall has more than 300 retail and F&B outlets.

In a June 25 press release, Landsec says it now owns 66.25% in Bluewater. It expects the acquisition to increase the company’s net rental income by GBP10.3 million on an annualised basis.

 

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"The 20-year total shareholder return (TSR), which is a measure of portfolio performance over a 20-year period, fell from 9 per cent to 7 per cent.
The 10-year TSR stayed at 6 per cent, while the one-year TSR reversed into a gain of 1.6 per cent from minus 5.07 per cent in 2023."

This is under-performance when the stock markets are delivering higher returns and private equity are delivering double-digit returns.
So how much was Ho Ching paid, and how much are the senior management and investment managers paid?

Temasek sees investment opportunities in India, South-east Asia amid geopolitical shifts​

Temasek International deputy chief executive officer Chia Song Hwee (second from right) speaking at the Temasek Review on July 9. ST PHOTO: GIN TAY

Chor Khieng Yuit
Senior Business Correspondent

Jul 10, 2024

SINGAPORE - Temasek has been paying a lot more attention to emerging investment opportunities and potential risks to its portfolio, as a result of geopolitical shifts and tensions over the past five years.
“For every new investment that we look at, we have to look at any geopolitical events that will affect that particular asset. Then we do our risk assessment. If there is something that we feel uncomfortable about, we will not do it,” the investment firm’s deputy chief executive Chia Song Hwee said.
There has been tighter scrutiny on foreign investments in sectors crucial to national security in many countries worldwide. Therefore, Temasek must be selective over where it invests, Mr Chia said.
India, where Prime Minister Narendra Modi recently won a third term in office by a narrow margin, is one country in which Temasek sees investment opportunities despite recent geopolitical shifts.
In the 2024 financial year (FY), Temasek’s portfolio exposure to India grew to 7 per cent, from 6 per cent in FY2023.
Mr Alpin Mehta, head of real estate and deputy head of private equity fund investments at Temasek, said that with Mr Modi back in power, “the focus will be on fiscal consolidation, to increase spending on infrastructure and the green transition in India and to continue the privatisation that has been happening”.
Opportunities are also emerging in sectors including financial services, life sciences, technology, consumer and healthcare in India, said Mr Mehta.

Some of Temasek’s investments in the country are Manipal Healthcare Services, a healthcare provider in the private sector; and Mahindra Electric, an electric vehicle manufacturer.
Ms Connie Chan, Temasek’s head of financial services, added that there is a very large and growing middle-income population in India, with private consumption now accounting for about 50 per cent to 60 per cent of the country’s gross domestic product.
Indian banks are a proxy for the macro economy, she said, adding that there are also opportunities in other areas of financial services, such as insurance, where people can now afford insurance policies as they become more affluent.

Mr Chia said Temasek remains committed to China and continues to look for investment opportunities there.
This is despite concerns that a win by Republican presidential candidate Donald Trump during the US election in November could herald a new era of tariffs and US-China tensions.
To guard its portfolio against geopolitical risks, Temasek invests on the assumption that the strategic competition between the US and China is not going away, Mr Chia said.
For example, it is staying out of areas that could potentially feel the impact of strained ties between the two biggest economies in the world. Instead, it will focus on Chinese companies that rely on domestic demand.
He added that some sectors that Temasek will invest in include biotechnology, robotics and local Chinese companies that stand to benefit from the move to replace imports with domestic production. Recently, the investment company has also devoted more attention to the electric vehicle value chain.

In FY2024, Temasek’s exposure to China dropped to 19 per cent of its overall portfolio, from 22 per cent in FY2023.
Ms Png Chin Yee, chief financial officer at Temasek, said that most of the decline was due to a fall in the market value of its investments in China.
She added that a closer look at the operating results of its Chinese portfolio companies showed they still have good earnings growth.
However, because the market has assigned a lower value to these earnings, that has impacted Temasek’s returns and portfolio performance over the last few years, Ms Png said.
Ms Chan noted that Temasek has been reshaping its portfolio in China over the past 20 years.
“When we first invested in China, it was really through the banks, because that was one of the only ways back then that you can actually invest in the market.
“As the economy developed, there were other opportunities, and we took advantage of that to diversify our holdings into the Chinese internet companies like Alibaba, Tencent and Baidu.”
As a whole, Temasek recorded an improvement in its net portfolio value to $389 billion in FY2024, following a drop in the previous financial year.
The 20-year total shareholder return (TSR), which is a measure of portfolio performance over a 20-year period, fell from 9 per cent to 7 per cent.
The drop was because 2024’s figure excluded the strong recovery period post-Sars in 2004, when the 20-year TSR surged 20 per cent.

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The 10-year TSR stayed at 6 per cent, while the one-year TSR reversed into a gain of 1.6 per cent from minus 5.07 per cent in 2023.
Currently, the bulk of Temasek’s underlying assets (65 per cent) are in the Asia-Pacific, with Singapore accounting for 27 per cent.
That is followed by the US, with 22 per cent of its underlying assets, and the Europe, Middle East and Africa region with 13 per cent.
Mr Mehta said Temasek is scaling up its exposure to South-east Asia and Japan.
The South-east Asia region is set to benefit from domestic demand, a recovery in the global manufacturing cycle and an upswing in tourism, he added.
The region is also well positioned to capture investment flows as companies move to diversify their supply chains or look for alternative manufacturing locations outside China.
Temasek’s exposure to Japan is still relatively small compared with its investments in other markets, with 1 per cent of its underlying assets in the country.
Mr Mehta said logistics and data centres are poised to ride on the huge demand for e-commerce in Japan.
“There is a lot of scope for development of new-age logistics,” he said.

 

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Temasek aims to invest up to $13.4 billion in India as it turns cautious over China​

Temasek had said profits from investments in the US and India were helping to cushion the impact of underperformance in China. PHOTO: REUTERS

Jul 16, 2024

MUMBAI – Singapore’s investment company, Temasek, plans to invest up to US$10 billion (S$13.4 billion) in India over three years in sectors such as financial services and healthcare, a top executive said on July 15, favouring the South Asian nation as it turns cautious over China.
India’s economy is growing sharply and its stock markets are trading near record highs amid an initial public offering (IPO) and deal-making boom. India accounts for 7 per cent of Temasek’s global exposure, which the firm wants to increase further, said Mr Mohit Bhandari, the company’s managing director for India investments.
“We are bullish in India for the long term,” Mr Bhandari said in an interview at Temasek’s Mumbai office.
“We are cognisant of the current economic and the geopolitical tensions that exist (in China) and, to that extent, we will align our portfolio accordingly,” he added.
Temasek last week said that profits from investments in the United States and India were helping to cushion the impact of underperformance in China. It also said that it is taking a cautious approach to China amid trade tensions.
About 22 per cent of Temasek’s investments are in the US, and 19 per cent in China, and its exposure to the Americas surpassed China in the last financial year for the first time in a decade.
In India, Temasek deployed US$3 billion in the fiscal year that ended March 31, its largest annual investment so far.

Mr Bhandari also said that Temasek will look at hiring more staff in India, up from the current 20, as its portfolio grows, but declined to share specifics.
Temasek’s current India exposure includes investments in HDFC Bank, IPO-bound e-scooter maker Ola Electric and Manipal Hospitals.
In April 2023, Temasek spent US$2 billion to raise its stake in Manipal to 59 per cent from 18 per cent in India’s biggest hospital sector deal. It later sold a minority stake to Novo Nordisk’s parent Novo Holdings and Abu Dhabi’s sovereign investor Mubadala.
Indian hospital chains and healthcare groups are seeing more and more interest from foreign investors as many expand into smaller cities, where demand for private care is rising as public hospitals remain overburdened.
Temasek will continue to scout for more investment opportunities in the healthcare space as it believes the sector is a “multi-decade” growth story in India, Mr Bhandari said. REUTERS

 

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GIC posts 3.9% annualised return over 20 years​

GIC’s chief executive Lim Chow Kiat has warned that the profound uncertainty the fund faces is likely to continue to weigh on returns. PHOTO: LIANHE ZAOBAO FILE

Claire Huang
Senior Business Correspondent

Jul 24, 2024

SINGAPORE - Sovereign wealth fund GIC posted its weakest 20-year rolling returns in four years, on the back of lower returns in recent years and stubborn inflation.
GIC, one of three entities that contribute to Singapore’s reserves, reported a 3.9 per cent annualised rolling 20-year real rate of return for the financial year ended March 31, 2024. This figure factors in inflation. The latest rate of return, which spans April 2004 to March 2024, is down from 4.6 per cent in 2023, 4.2 per cent in 2022 and 4.3 per cent in 2021.
The annualised nominal return, which does not account for inflation, came in at 5.8 per cent in US dollar terms – reflecting how global inflation has chipped away at returns.
In July, the International Monetary Fund maintained its April forecast that global inflation is expected to decline steadily, from 6.8 per cent in 2023 to 5.9 per cent in 2024 and 4.5 per cent in 2025.
The nominal return of 5.8 per cent means that US$1 million invested with GIC in 2004 would have grown to roughly US$3.1 million (S$4.17 million) today.
The 2024 figures are the lowest in four years, when the annualised US dollar nominal rate of return over a 20-year rolling period as at end-March 2020 stood at 4.6 per cent, while the 20-year real rate of return was 2.7 per cent.
The group’s chief executive Lim Chow Kiat said in its annual report on July 24 that in the early 2000s, specifically around 2003 and 2004, there was exceptional recovery in equity markets after the dot.com crash.

But this particular period has dropped out of the rolling 20-year real return window.
“That exceptional year contrasted starkly with the lower returns of recent years due to weak returns in fixed income and global equities, particularly in emerging markets,” Mr Lim said.
In his outlook, Mr Lim said: “Uncertainty is a given for any investor, but events in the past few years intensified it to a profound level, challenging foundational assumptions of the past four decades.”

He noted that the world order is being reshaped, domestic politics in several large countries is in a state of flux, and the effects of climate change are becoming both more intense and unpredictable, even as rapid technological changes buffet societies.
“It is no longer sufficient for investors to only consider where we are in the macroeconomic cycle or the future path of interest rates. National security concerns, politically driven regulations, climate impacts and policy, and more must be part of the calculus,” Mr Lim said, adding that the unprecedented uncertainty translates into a wider range of possible outcomes.
He cautioned in a briefing on July 23 that the profound uncertainty the fund faces is likely to continue to weigh on returns. Mr Lim said that amid the volatility, the fund has to play to its strengths and seize new opportunities.

“One example is climate transition. We saw an opportunity to leverage our long-term, flexible capital – one of GIC’s key strengths – to bridge a funding gap for climate technologies such as green steel and battery storage, where companies often find themselves caught between traditional buckets of capital,” he said.
Mr Lim noted that these firms need long-term capital to grow but are too mature for venture and growth equity, and also lack the track record to attract infrastructure funding.
The fund has also set up an investment programme for green assets in 2024, following green shoots in the sustainability solutions group in the private equity department, investing in climate technologies.
Over the past years, GIC said, it has been diversifying on a far more granular level to enhance the resilience of the total portfolio, including stepping up investments in infrastructure and real estate.
For instance, in real estate, the fund is looking at what opportunities there are in China.
When asked how its investments in China have done compared with other regions, the group’s chief investment officer Jeffrey Jaensubhakij said at the briefing that GIC’s returns are not that different from what other investors can get in the market, given that the fund is a large investor.
“Through the long term, it has been fine. In the last few years, because of the changes in both the Chinese economy and investment environment itself, then relative to where you invest in the rest of the world, it hasn’t performed as well,” he said. But Dr Jaensubhakij noted that within what the group has chosen, be it private equity or real estate, GIC has been in sectors that have outperformed the market in general.

When asked how GIC sources deals, Mr Lim said the majority of the investments made are through intermediaries and long-term partners such as banks, fund managers and family offices.
Increasingly, the fund is sourcing its own deals as well, he added.
“We have now more local presence around the world. We have 10 offices outside of Singapore that allow us to build local expertise, that allow us to expand our partnerships with the best players in each sector, so that’s quite an advantage I would say,” Mr Lim said. He added that new deals done by the fund will have to meet a higher bar.
The fund measures its performance by evaluating returns over a 20-year period, which is in line with its mandate to preserve and enhance the international purchasing power of the reserves over the long term.
GIC’s expected long-term returns are used to calculate the annual Net Investment Returns Contribution (NIRC), which is derived from up to 50 per cent of the investment returns from the Monetary Authority of Singapore, GIC and Singapore’s investment company Temasek. It is a significant contributor to the Singapore Government’s budget. The NIRC is an estimated $23.5 billion in 2024.

 

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"Chinese investments make up 19 per cent of the portfolio, and those in Singapore account for 27 per cent."

Temasek put too much into China at the wrong time, before China went into a deflationary mode.

Temasek plans to invest $40 billion in US over next five years​

For the US, Temasek is looking to invest in AI-related firms, as well as semiconductor and infrastructure plays. PHOTO: ST FILE

Jul 30, 2024

WASHINGTON - Singapore’s investment company Temasek plans to invest US$30 billion (S$40.3 billion) in the US market over the next five years as the firm remains cautious about putting money into China.
“The Americas is going to be and continue to be the largest recipient of capital,” Ms Jane Atherton, Temasek’s head of North America, said in an interview on July 29.
Temasek’s investments in North and South America surpassed its investments in China for the first time in at least a decade in 2024. Americas investments now account for 22 per cent, or US$63 billion, of its portfolio. Chinese investments make up 19 per cent of the portfolio, and those in Singapore account for 27 per cent.
The firm oversaw $389 billion of assets as at March, up from $382 billion a year earlier.
China and the United States are vying to dominate semiconductor manufacturing because of its link to artificial intelligence and other aspects of the digital economy. The US is trying to limit the rise of its Asian rival by deploying export controls and tariffs, and even considering a rule that would curb China’s access to advanced semiconductor technology.
That US-China strife has left investors navigating a geopolitical tripwire as they seek to capture a piece of one of the hottest sectors in the market. Ms Atherton said there are ways to structure investments around certain constraints, such as taking passive public equity stakes in listed semiconductor companies.
In China, Temasek has avoided investing in geopolitically sensitive areas, instead focusing on large domestic companies..

It is looking to make new investments in electric vehicle makers and biotech firms.
“We make sure we are not investing in businesses that are in the crosshairs of geopolitical tensions,” Ms Atherton said.
For the US, she said Temasek is looking to invest in AI-related firms, as well as semiconductor and infrastructure plays such as data centres and the companies that power them. It can gain exposure to data centres through its own real estate subsidiaries – Mapletree Investments and CapitaLand Group – or by investing alongside private equity firms, according to Ms Atherton.
Temasek has grown its US assets fivefold in the past decade. BLOOMBERG

 

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"Always buy high."

Temasek spent billions on US tech stocks before July sell-off​

Temasek increased the value of its holdings in 11 big tech firms by US$3.3 billion (S$4.35 billion) in the three months ended June 30. PHOTO: REUTERS

Aug 15, 2024

Singapore’s investment company Temasek spent billions of dollars in the second quarter buying shares in US technology giants, just before the sector dropped in July.
Temasek increased the value of its holdings in 11 big tech firms by US$3.3 billion (S$4.35 billion) in the three months ended June 30, according to an analysis of its two most recent filings.
The vast bulk of the increase – some US$3.2 billion – went into six of those firms: Microsoft, Apple, Nvidia, Alphabet, Amazon.com and Meta Platforms.
By the end of July, however, most of those companies saw their stocks slide amid concern about the extent of artificial intelligence-related gains and fears of a recession.
Alphabet’s and Amazon’s share prices have fallen by about 12 per cent since the end of June, while Microsoft’s are down around 7 per cent over that period.
The Straits Times understands that this trade could have been done in April and May, and the position would still be up despite the July tech sell-down.
Many of the tech shares held by Temasek have started to recover this week, and it is unclear how it has invested since June 30.

SPH Media Limited, its related corporations and affiliates as well as their agents and authorised service providers.
marketing and promotions.
The firm may have made gains depending on its purchase price, sold right before the fall, or even snapped up more as the shares declined in an effort to buy the dip.
With a net portfolio value of $389 billion as at March 31, the purchases would have represented around 1 per cent of its total holdings.
When contacted by The Straits Times, Temasek declined to comment.
The multibillion-dollar buying spree underscores Temasek’s commitment to ramping up investments in the United States, which it said in July would be the largest destination for its capital, with plans to invest US$30 billion over the next five years. BLOOMBERG

 

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Singapore Airlines gets India’s FDI approval for Air India-Vistara merger​

SIA will hold a 25.1 per cent stake in the enlarged Air India Group after the merger. PHOTOS: REUTERS
Updated

Aug 30, 2024


SINGAPORE - India cleared the last roadblock to national carrier Air India’s merger with smaller rival Vistara, by approving foreign direct investment (FDI) by Singapore Airlines (SIA) into the new combined carrier.
SIA will hold a 25.1 per cent stake in the combined Air India group in return for a 20.585 billion rupee (S$320 million) investment.
The Singapore carrier is due to invest up to 50.2 billion rupees after the merger is completed.
Vistara said separately on Aug 30 that its planes would be operated by Air India from November. From Sept 3, it will not be possible to book with Vistara for travel on or after Nov 12.
“All Vistara aircraft thereafter will be operated by Air India and bookings for the routes operated by these aircraft will be redirected to Air India’s website,” it added.
SIA, which owns 49 per cent of Vistara in a joint venture with India’s Tata Group, said earlier on Aug 30 that it expects the merger, which Indian and Singaporean antitrust regulators have cleared, to be completed by the end of 2024.
That is delayed from the original target of March, and SIA said the companies were in talks about an extension to the deal’s agreed stop date of Oct 31.

Air India staff have been working for months with Vistara on the transition and look forward to offering an expanded network, more flight options and an improved frequent flier programme, the flag carrier’s chief executive Campbell Wilson said in a statement.
The merger will give SIA greater exposure to one of the world’s fastest-growing travel markets and make it the only foreign player to have a significant stake in one of the country’s airlines.
Global airlines are expanding flights to the country and Indian airlines in 2023 placed record orders for hundreds of new planes.
The deal also widens SIA’s reach beyond its smaller home market, with its reliance on international travel hurting the company during the Covid-19 pandemic. The carrier has wrapped up a flurry of tie-ups in recent years including joint-venture deals with neighbours Malaysia Airlines and more recently Garuda Indonesia. It is also seeking a similar pact with Japan’s All Nippon Airways.
The Air India-Vistara merger, more than 18 months in the making, adds to a wave of industry deals, with Air France-KLM taking a 19.9 per cent stake in SAS this week, while Deutsche Lufthansa secured a €325 million (S$469 million) investment in Italy’s ITA Airways in July.
Ongoing airline transactions include Alaska Air Group’s and Hawaiian Holdings’ US$1.9 billion (S$2.5 billion) merger, and Korean Air’s US$1.4 billion bid for smaller rival Asiana Airlines.
Not all proposed deals have succeeded however, with US carriers JetBlue and Spirit abandoning a US$3.8 billion pact and IAG terminating a bid to take over Spain’s Air Europa.
Air India – which includes low-cost carriers Air India Express and AirAsia India – is wholly owned by Tata Sons. It took over Air India in 2022 and embarked on a multimillion-dollar transformation of the former state-run airline.
Shares of SIA closed seven cents, or 1.1 per cent higher, at $6.28 on Aug 30.
BLOOMBERG, REUTERS

 

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Temasek-owned GenZero to review carbon credit investment after fraud charges​

GenZero said in a statement that they are assessing the implications on the integrity and impact of the current outcomes on the carbon credit programme. PHOTO: GENZERO.CO

David Fogarty
Climate Change Editor

Oct 04, 2024

SINGAPORE – Temasek-owned investment firm GenZero said it is reviewing its involvement in a South-east Asian carbon credit programme after US federal prosecutors filed fraud charges against a senior figure behind the company running the programme.
Former C-Quest Capital (CQC) chief executive officer Kenneth Newcombe, who stepped down from the role in February, was indicted on Oct 2 in New York on wire fraud and securities and commodities fraud charges.
Under Newcombe, the US-based CQC ramped up its programme from 2021 to roll out more efficient cookstoves to local communities, mainly in Africa and Asia. The stoves are said to burn less fuel and produce less pollution. Carbon credits can be claimed for each tonne of carbon dioxide (CO2) emission avoided.
Newcombe and some of his ex-colleagues were charged over fraudulently exaggerating the amount of emissions avoided and duping investors in a case that risks further damaging the already tarnished image of the global voluntary carbon market.
Among the others facing charges are Tridip Goswami, former head of CQC’s carbon and sustainability accounting team, and Jason Steele, the company’s former chief operating officer.
The 77-year-old Newcombe, a pioneer of the carbon credit market, denies any wrongdoing, Bloomberg reported, quoting a statement from him.
GenZero said in a statement to The Straits Times on Oct 3: “As a partner in C-Quest Capital’s South-east Asia Clean Cookstove Programme, we are assessing the implications on the integrity and impact of the current outcomes on the programme.

“We take allegations of wrongdoing by our programme partners seriously, particularly when those actions impact the credibility of carbon markets.”
In a deal announced in 2022, GenZero and Pavilion Energy – until recently a wholly owned subsidiary of Temasek – invested US$14 million (S$18.3 million) in the South-east Asia cookstove programme.
Pavilion Energy told ST on Oct 4 it has fully exited the CQC project and has no further comment.

In a statement, the US Attorney’s Office for the Southern District of New York accused Newcombe and his co-defendants at CQC of fraudulently obtaining carbon credits worth tens of millions of dollars, and fraudulently securing more than US$100 million in investment. The charges are related to misdeeds allegedly committed between 2021 and 2023.
The statement said the defendants “manipulated data to make it appear as if certain cookstove projects were far more successful in reducing carbon emissions than was actually the case”.
The statement cited internal e-mails showing that there was a coordinated attempt to inflate the emission reductions of several projects or claim reductions from cookstoves that did not exist.
As a result, investors were misled, along with the carbon credit standards body Verra. Verra is the main non-profit organisation that vets and verifies voluntary carbon credit projects and issues carbon credits for those projects.

Because of the allegedly false information from CQC, Verra was “tricked” into giving CQC carbon credits for emission reductions that, according to Verra’s methodology for calculating such reductions, had not in fact been achieved, the US Attorney’s Office statement said.
In a June 26 statement, CQC said it had uncovered the suspected fraud and voluntarily notified the US authorities. The company has not been charged.
On the same day as CQC’s statement, Verra said it had immediately suspended 27 CQC projects, most of them cookstove projects, and launched a review of the projects.
The regional cookstove programme involved projects in Cambodia, Laos, Thailand and Vietnam. In a blog posting announcing the funding agreement with GenZero and Pavilion Energy at the time, CQC said: “The investment will initially fund the deployment of clean cookstoves to 650,000 rural households... with the opportunity to further scale to one million households.”
All four projects were fully verified and registered under Verra.
CQC said in June that it was “voluntarily facilitating the cancellation of any over-issued credits from its inventory in Verra” and “adopting new measurement, reporting and verification processes, crediting methodologies, and policies to ensure its future activities meet the highest ethical standards”.
A Verra spokesman told ST the review into the 27 suspect CQC projects was ongoing.
The spokesman said that if they find there has been an excess issuance of credits, CQC is then responsible for compensating for that excess. And one way to resolve this is to cancel the excess credits, meaning they are removed from Verra’s registry.
The global voluntary carbon market has been hit by a series of investigations and media reports alleging some carbon credit projects, including investments such as tree plantations or to protect threatened areas of rainforest, have been issued with too many credits.
There have also been allegations that some projects were not truly “additional”.
Carbon credits are meant to compensate investors for projects that would not otherwise have happened without the revenue from credit sales.
For instance, a project could be protecting a patch of rainforest that was in danger of being cleared for mining or agriculture. But in some cases, the carbon projects would have gone ahead anyway, meaning they were not “additional”.

Yet, many carbon credit projects are good for the climate and local communities, experts say.
And for an industry that is already working on tougher standards, stronger rules and quick responses to any instances of alleged fraud are positive signs.
Ms Donna Lee, co-founder of carbon credit project ratings firm Calyx Global, told ST the case involving Newcombe and his associates was a rarity in the voluntary carbon market, which was worth about US$2 billion in 2023.
“We believe the vast majority (of cookstove projects) are not engaging in the fraudulent activity,” she said.
“Many cookstove projects are engaging in legitimate mitigation activities that benefit the atmosphere, as well as the health of women and children. The methodologies for measuring that impact need to be updated to avoid over-claiming, but we should not confuse this issue with falsifying information,” she said.
GenZero, which is focused on accelerating global decarbonisation, including carbon credit project investments, said: “Stronger governance, enhanced transparency and clearer guard rails will drive progress and greater confidence in the integrity of the voluntary carbon market.”
ST has contacted CQC for comment.

 

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Temasek in talks for $1.3 billion-plus stake in India’s biggest snack maker​

Temasek has deployed nearly US$37 billion in India over the past two decades. ST FILE PHOTO

Oct 04, 2024

MUMBAI - Temasek is in talks to buy a minority stake in Haldiram Snacks, people familiar with the matter said, a transaction that may value India’s biggest snack maker at about US$11 billion (S$14.3 billion).
The Singapore state investor is holding preliminary talks to buy a 10 per cent to 15 per cent stake in Haldiram, the people said, asking not to be identified because the matter is private.
This works out to a possible US$1 billion-plus stake in the Indian company.
The investment may serve as a stepping stone towards a potential initial public offering (IPO) of the company, the people said.
Talks are ongoing and may not lead to a transaction, the people said, adding that the company has drawn interest from other prospective bidders.
A representative for Temasek declined to comment, while Haldiram did not have an immediate comment.
Founded by Ganga Bishan Agarwal in the 1930s in north India, Haldiram sells a range of foods from sweet and savoury snacks to frozen meals and breads.

It also runs 43 restaurants in and around Delhi, according to its website.
The Agarwal family has been exploring options including a sale of the business and a potential IPO, Bloomberg News has reported.
Global investors have been increasing their focus on India, lured by its rapid economic growth. That has turned the country into a hotspot for deal-making.
Temasek has deployed nearly US$37 billion in India over the past two decades, according to Mr Vishesh Shrivastav, its managing director for India investments. That figure is set to rise sharply, with the company saying last year it planned to commit billions more.
Temasek has been targeting minority stakes and helping Indian companies to grow, largely eschewing the trend of taking majority holdings in firms based in the world’s most populous country. Core areas include digitalisation, consumption and sustainable living, according to Mr Shrivastav.
Those potential minority investments include VFS Global, in a transaction valuing the visa outsourcing and technology services firm at about US$7 billion including debt, Bloomberg News has reported. BLOOMBERG

 

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One Championship lays off staff including those from its Singapore office​

One Championship CEO Chatri Sityodtong said the lay-offs were made as the “external global macroeconomic environment remains both challenging and uncertain”. PHOTO: ST FILE

Deepanraj Ganesan

Oct 17, 2024

SINGAPORE – Mixed martial arts (MMA) organisation One Championship has laid off a number of employees – including those from its Singapore headquarters – on Oct 16.
In response to queries from The Straits Times, a spokesperson said: “On Wednesday, One Championship made the difficult decision to lay off a few dozen employees as part of its overall strategic plan to bring the company to profitability in the coming months.
“This decision was not made lightly and reflects our ongoing commitment to streamlining operations and focusing on long-term sustainability and growth.”
According to its LinkedIn profile, One has a global staff strength of between 201 and 500. Besides Singapore, it also has offices in Tokyo, Los Angeles, New York, London, Shanghai, Milan, Bangkok, Manila, Jakarta and Bengaluru.
Its institutional investors include Temasek Holdings.
While One did not reveal how many of its staff in its Singapore office were let go, an affected party who declined to be named said that over 20 of his colleagues here, across the broadcast, e-sports, finance, marketing and public relations departments, were laid off.
The source said: “It’s been a rumour for a long time that there were going to be layoffs. So I guess we weren’t really surprised it happened. I am surprised it happened to me.

“There have also been rumours that the company is looking to move most of its operations to (the) Philippines or Thailand.
“There is not much else to be said other than it was a great ride. I enjoyed my work. I enjoyed working with my good colleagues.”
Sources told ST that a virtual meeting was held with staff from all its offices on the morning of Oct 16 with One chief executive Chatri Sityodtong announcing the cuts. He had told staff that if they were affected, they would receive a call from their respective department heads, which resulted in a nervy few hours for some.

Chatri later also sent an internal e-mail announcing the layoff of “a few dozen superstar teammates” as “part of the overall strategic plan to bring One to profitability in the coming months”.
He added in the e-mail that was seen by ST: “Please know that your leaders and I weighed this difficult decision with painstaking detail and heartfelt empathy.”
The move, Chatri explained in the e-mail, was made despite the company being “on the verge of profitability through a combination of record revenues and cost efficiencies” as the “external global macroeconomic environment remains both challenging and uncertain” while the “capital markets continue to demand immediate profitability and profit maximisation”.
He added that affected staff will receive severance pay, with their Evolve membership – which grants users access to its Evolve gyms – and corporate health insurance extended until the end of the year. Those who want to exercise their stock options will also be given an extended deadline of 24 months.
News of the layoff will come as a surprise given that in June, Chatri had announced on social media that One will turn profitable and achieve positive cash flow in the third or fourth quarter of 2024.

On Oct 15, Bloomberg, citing its sources, reported that Group One Holdings, the company behind One Championship, had raised at least US$50 million (S$65.5 million) from investors, including Qatar Investment Authority.
One was founded in 2011 and staged its first event in September that year, at the Singapore Indoor Stadium.
Since then, it has held nearly 300 live events in 13 countries and territories across Asia.
On its website, One describes itself as Asia’s largest global sports media platform.
Over the years, it has become the home for some storied MMA names like Demetrious Johnson and Eddie Alvarez, and has also produced stars of its own like the Lee siblings Angela and Christian, who have fought under the Singapore flag.

 

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TLS Beta is a wholly owned subsidiary of Temasek Life Sciences, which is linked to Singapore’s investment company, Temasek.

Temasek declined to respond to queries from ST.

$65m fish farm to be sold at fraction of cost amid owner’s financial woes​

The multi-storey fish farming facility has been conditionally sold to a local construction and engineering firm. ST PHOTO: KUA CHEE SIONG

Cheryl Tan
Correspondent

Oct 17, 2024

SINGAPORE - Two companies have conditionally agreed to purchase beleaguered Apollo Aquaculture Group’s (AAG) eight-storey fish farm in Lim Chu Kang, more than two years after the company ran into financial difficulties.
The $65 million multi-storey fish farming facility, owned by the group’s subsidiary Apollo Aquarium, has been conditionally sold to local construction and engineering firm HPC Builders and Aquachamp, an investment holding company which has subsidiaries in the fish farming industry.
One of the directors of Aquachamp is also a director of AAG.
The acquisition is subject to approval from the Singapore Food Agency (SFA), among other conditions. SFA declined to respond to ST’s request for comment.
The facility, one of Singapore’s tallest fish farms, began operations in 2021, when it was showcased as a high-tech farming solution that addressed the Republic’s land-scarcity constraints.
However, it has been lying dormant since its parent company, AAG, ran into financial difficulties and was placed under judicial management in May 2022.
In early 2023, Apollo Aquarium ceased operations.

Judicial management is a form of debt restructuring which aims to prevent viable companies in financial difficulties from being liquidated.
In judicial management, an independent judicial manager is appointed to manage the affairs, business and property of a company under financial distress.
The Apollo group has a total of five subsidiary companies.

They are Apollo Aquarium; water technology firm Cube 2; Aquaworld Tropical Fish, a company involved in the ornamental fish industry; Smart Hatchery, which operates fish hatcheries, and Apollo Marine Seafood, which is involved in the retail sale of meat, poultry, eggs and seafood.
Of the five, only Apollo Aquarium is still live, while the other four companies have already entered into liquidation.
AAG’s judicial manager, Deloitte Singapore’s strategy, risks and transactions partner Tan Wei Cheong, said that the company’s financial challenges resulted largely from delays in the completion of the fish farm.
The delays had resulted in escalating costs and, in turn, affected the group’s revenue and operations, he added.
The group is divesting its stake in Apollo Aquarium as part of its restructuring.
Mr Tan said he was unable to comment further on the sale and purchase agreement as it is still being finalised.
According to media reports in 2021, the company aimed to farm hybrid grouper and coral trout on the first three storeys of its Lim Chu Kang facility, with an expected output of up to 1,000 tonnes of fish a year from 2021, before scaling up to 2,700 tonnes by 2023.
However, the company’s operations ceased in early 2023. Had it hit its target output, it would have significantly added to the 4,100 tonnes of seafood Singapore produced in 2023.

According to media reports in 2021, Apollo Aquarium wanted to farm hybrid grouper and coral trout at the first three storeys of its Lim Chu Kang facility. PHOTO: ST FILE
According to a filing on the Hong Kong stock exchange on May 31, 2024, HPC Builders will purchase 70 per cent of Apollo Aquarium’s equity, for not more than $3.5 million, while the remaining 30 per cent will be sold to Aquachamp.
HPC Builders’ parent company, HPC Holdings, is listed in Hong Kong.
As at March 31, the book value of the farm – including its equipment and machinery – was worth $44 million.
The multi-storey fish farm is said to be Apollo Aquarium’s “only significant asset”, according to the filing.
The three entities had entered into an agreement for HPC and Aquachamp to acquire Apollo Aquarium on May 31.
The sale will essentially allow HPC Holdings to invest in Singapore’s aquaculture industry at a “low cost”, according to the filing.
Aquachamp, which is an “experienced fish farm operator”, according to the bourse filing, will be in charge of the management and operations of the fish farm. ST has contacted the company for comment.
HPC Holdings said that the investment was done at a “bargain price”, and the fish farm will be able to “run at full production capacity, yielding favourable returns in the long run, with a stable sales income and a broadened revenue base”.

Checks by ST found that Aquachamp’s registered address is in the same location as an ornamental fish farm known as Max Koi Farm, situated close to the Apollo facility in Lim Chu Kang.
Accounting and Corporate Regulatory Authority (Acra) records show that Max Koi Farm is owned by Mr Ng Chuen Guan, who is also a director of Aquachamp, and a director of AAG, in which he owns close to 2.9 million shares.
AAG’s two largest shareholders are Ng Yong Hock Capital, which holds around 55.1 per cent of the company’s shares, and TLS Beta, which holds about 33.1 per cent of the shares, equivalent to $35 million of paid-up capital.
TLS Beta is a wholly owned subsidiary of Temasek Life Sciences, which is linked to Singapore’s investment company, Temasek.
Temasek declined to respond to queries from ST.
The remaining equity is owned by three companies and 14 people, with each of their equity stake ranging from approximately 0.1 per cent to 3.6 per cent, according to the filing.
The group’s subsidiary, Apollo Aquarium, is primarily involved in fish farming activities and the import and export of freshwater ornamental fish.
According to the filing by HPC Holdings, as at March 31, Apollo Aquarium’s unaudited debt stood at about $35.4 million.
Cargill TSF Asia, the financial services arm of the agricultural commodity giant, was listed as one of AAG’s creditors, according to Acra. ST has approached Cargill for comment.
ST has reached out to AAG chief executive Eric Ng for comment.

Timeline of events:​

April 18, 2018:​

Apollo Aquarium is awarded two plots of land in Lim Chu Kang by the Singapore Food Agency (SFA). It paid $378,000 for the 1.56ha plot, and $587,000 for the 2.4ha plot. Both plots have a tenure of 20 years each.

First quarter of 2021:​

The eight-storey fish farm, which cost $65 million to build, begins operations in Lim Chu Kang. Its gross floor area is 55,214 sq m.
The farm said it would grow hybrid grouper and coral trout on the first three storeys of the building, with an initial target of 1,000 tonnes of fish per year.

March 17, 2022:​

Apollo Aquaculture Group, the parent company of Apollo Aquarium, is placed under interim judicial management.

May 4, 2022:​

Apollo Aquaculture Group enters into judicial management

Feb 4, 2023:​

Apollo Aquaculture Group’s judicial managers, Mr Tan Wei Cheong and Mr Lim Loo Khoon of professional services firm Deloitte and Touche, said that the company is in talks with investors to rehabilitate the group.
Apollo Aquarium, which owns the fish farm facility, is not under any form of administration but is said to have stopped operations at the beginning of 2023.

May 31, 2024:​

According to a filing on the Hong Kong Stock Exchange, local construction and engineering firm HPC Builders and investment holding company Aquachamp, which has subsidiaries in the fish farming business, have conditionally agreed to buy Apollo Aquarium.
HPC Builders will purchase 70 per cent of equity for not more than $3.5 million, while Aquachamp will purchase the remaining 30 per cent.
SFA will need to approve the sale and purchase of the equity between the companies.
HPC Builders will also need to reinstate part of the unused plots owned by Apollo Aquaculture.

 

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Aussie regulator sues Singtel’s Optus over alleged misconduct involving sales to vulnerable customers​

Australia’s competition watchdog alleged that Optus engaged in misconduct while selling mobile phones and plans, particularly to vulnerable customers. PHOTO: REUTERS

Oct 31, 2024

BENGALURU – Australia’s competition watchdog is taking Singtel-owned Optus to court, alleging it engaged in misconduct while selling mobile phones and plans, particularly to vulnerable customers.
The Australian Competition and Consumer Commission (ACCC) on Oct 31 alleged that Optus’ conduct disproportionately impacted consumers and that its practices were, in a way, backed by remuneration for sales staff.
“In some cases, we allege Optus took steps to protect its own financial interests by clawing back commissions to sales staff but failed to remediate affected consumers,” said ACCC chair Gina Cass-Gottlieb.
The case against Optus involves allegations that the telecommunications provider acted unconscionably in its dealing with 429 customers by engaging in inappropriate sales conduct.
The ACCC is seeking declarations and orders for penalties, non-party consumer redress, publication orders, a compliance programme and costs.
The alleged conduct involves 363 customers from two Optus Darwin stores, 42 customers from the Optus Mount Isa store and 24 individual customers from store locations across Australia.
“We have taken disciplinary action (including terminations) against staff who we determined were responsible for this misconduct involving vulnerable customers,” Optus interim chief executive Michael Venter told Reuters in an e-mailed response.

SPH Media Limited, its related corporations and affiliates as well as their agents and authorised service providers.
marketing and promotions.
He said the majority of the sales occurred at three licensee-operated Optus stores, and the company is remediating affected customers by providing refunds, waiving outstanding debts and enabling them to keep their devices.
In a statement filed with the Singapore Exchange on Oct 31, Optus said: “At this stage, Optus Mobile is not able to determine the quantum of penalties, if any, that could arise. Any question regarding penalties is ultimately a matter for the Federal Court to determine.” REUTERS

 

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Singtel-owned Optus fined $10.6m by Australian regulator over emergency services outage​

The country’s No. 2 telecom carrier also failed to check up on more than 360 of those customers once the outage was resolved. PHOTO: OPTUS

Nov 08, 2024


BENGALURU – Australia’s telecom watchdog has fined Singtel subsidiary Optus A$12 million (S$10.6 million) for failing to provide emergency call services to thousands during a nationwide outage in 2023, the regulator said early on Nov 8.
The Australian Communications and Media Authority (ACMA) said it found 2,145 customers could not access the emergency call service during the outage in November 2023 that left half the population without internet or phone for much of the day.
The country’s No. 2 telecom carrier also failed to check up on more than 360 of those customers once the outage was resolved, the regulator added.
“Our findings indicate that Optus failed in the management of its network in a number of areas and that the outage should have been preventable,” ACMA chair Nerida O’Loughlin said in a statement.
This is the latest hit to the troubled telecom firm after the consumer watchdog just days ago dragged it to court alleging “misconduct” while selling mobile phones, accessories and plans to “vulnerable” customers.
Optus has been struggling to repair its reputation since a cyber attack in September 2022 that affected data of more than a million customers and triggered nationwide calls for tougher privacy rules.
The company acknowledged ACMA’s announcement and said it had made “changes to better manage emergency calls during network challenges”. REUTERS

 

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CapitaLand warns of China losses as Singapore property investor cuts exposure​

CapitaLand's current exposure to China is 27 per cent of its $113 billion in funds. PHOTO: LIANHE ZAOBAO

Nov 22, 2024

SINGAPORE – CapitaLand Investment, one of Asia’s largest property investment managers, warned of potential losses as it seeks to extricate itself from China’s real estate crisis.

The Singapore-listed firm wants to reduce its exposure in the world’s second-largest economy to 10-20 per cent of its expected $200 billion in funds under management by 2028, it said in an investor day presentation on Nov 22.

In doing so, the company may incur “potential fair value or divestment losses” that impact near-medium term non-operating earnings, it added.

Its current exposure to China is 27 per cent of its $113 billion in funds.

The listed investment arm of CapitaLand Group, which is owned by Singapore state investor Temasek, has long been a major investor in China, but a years-long property downturn there has made these bets, spanning from office space to malls, turn sour.

These struggles have hit the company’s stock, which is down almost 12 per cent in 2024 compared with a 16 per cent gain in the Straits Times Index.

Selling its property in China has been difficult, with the bulk of the $4.6 billion divestments in 2024 up to early November coming from Singapore and other countries like Japan.

CapitaLand Investment is seeking to more than double its operating earnings to more than $1 billion by 2028-2030, and could do new real estate investment trust listings in Australia, China and India, it said in the presentation.

So far, it has sought to increase its exposure elsewhere, including most recently announcing it will buy out SC Capital Partners Group, a Japan-focused property investor.

CapitaLand Investment’s management said in an analyst call earlier in November that it hopes to divest about $1 billion in China in 2024, according to a Citigroup Nov 6 note, which added that it estimates the company has just sold about $300 million so far.

Citigroup also said that the Singapore firm is aiming to divest about $3.5 billion Chinese assets on its balance sheet over three years, although it will stop giving divestment targets in 2025. BLOOMBERG