How GIC and Temasek are managing your money

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Ho Ching breaks silence over Temasek’s write down of its US$275 million investment in FTX, says it “can afford to be contrarian”​

By
The Online Citizen
-
26/11/2022

https://www.theonlinecitizen.com/20...t-in-ftx-says-it-can-afford-to-be-contrarian/

SINGAPORE — Mdm Ho Ching has broken her silence over the write-down of the US$275 investment by Temasek Holdings into bankrupted cryptocurrency FTX in a Facebook post on Saturday (26 Nov).
Mdm Ho who is the former Chief Executive Officer of the Singapore sovereign wealth fund for more than 18 years, wrote, “A loss is a loss, and always painful”.
She added, “A loss in what may turn out to be a badly managed company without adult supervision is egg on our face.”
“I am glad that Temasek has made a clear decision to write down this investment to zero.
This helps clear the head on what to do as a next step, without being blinkered by wishful thinking.”
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Mdm Ho who is also the spouse of Singapore Prime Minister Lee Hsien Loong acknowledged that it does not mitigate the loss or reduce the pain by saying BlackRock or Softbank or Sequoia also invested in FTX.
She noted that some of Temasek’s best investments were made by being contrarian, although she did not name examples of such investments.
Mdm Ho goes on to state, “And Temasek can afford to be contrarian bcos it has its own balance sheet and can think long term.”
“With a long term stance, and all the pros and cons that come with that stance, Temasek is not fazed by the twiddles and sentiments of the market.”
Temasek in its statement on 17 November, noted that the sum of US$275 million that was written off was 0.09% of its net portfolio value of S$403 billion as of 31 March 2022.
Mdm Ho pointed out that FTX is not a market volatility issue, and is a reminder that good intentions are not good enough.
“And we need to be clear minded about the risks with FOMO too. Let’s keep calm, as we continue to tend to the fields and fry other fishes.”

No Answer On Whether She Had Oversight Of Investment​

Mdm Ho, however, did not clarify in her Facebook post if she had oversight over the investment into FTX.
While Temasek claims that its US$275 million investment was made across 2 funding rounds from October 2021 to January 2022, FTX itself said in a press statement that Temasek had participated in the previously announced Series B in July 2021 along with the Series B-1 fundraiser held in October 2021.
If what FTX said was true, then Mdm Ho Ching would have overseen the initial investment into FTX before she stepped out of her CEO position in Oct last year.
A citizen has written an open letter to the Deputy Prime Minister and Minister of Finance over this matter and apparently, no response has been issued till date.

Silence Over Temasek’s Due Diligence Process In FTX Investment​

Mdm Ho also did not address the criticism against Temasek over the questionable due diligence allegedly conducted in eight months before investing in FTX.
In regard to its due diligence, Temasek said it had conducted an extensive due diligence process on FTX, which took approximately 8 months from February to October 2021.
“During this time, we reviewed FTX’s audited financial statement, which showed it to be profitable,” it said.
“Advice from external legal and cybersecurity specialists in key jurisdictions was sought, with legal and regulatory review done for the investments.”
“Separately, we also gathered qualitative feedback on the company and management team,” it assured but did say that it is not practicable to eliminate all risks.
Temasek then in its statement, goes on to blame Mr 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.” (emphasis ours)
In a filing to Delaware bankruptcy court, John J. Ray III, the new FTX CEO issued a scathing assessment of “unprecedented” poor management practices by his predecessor, Sam Bankman-Fried and listed a series of questionable financial activities in a filing to Delaware bankruptcy court.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” said Mr Ray in the document.
Mr Ray, who has previously supervised financial scandals such as Enron, criticized poor record-keeping and a lack of experience among senior managers.
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
He pointed out that FTX “did not keep appropriate books and records or security controls” for its digital assets, used unsecured shared email accounts to access private keys, and to this day cannot provide a list of those working for the company as at 11 November.
Ray also criticized the use of software to conceal the “misuse of corporate funds,” a failure to reconcile blockchain positions daily, and the absence of independent governance between Alameda and the cluster of companies that includes FTX.com
Again if FTX’s press statement in July last year is correct, Temasek would have invested in FTX even before the conclusion of its supposed due diligence process.

 

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Temasek’s “can afford to be contrarian” costs S’porean public more than S$6b in 2009​

By
Correspondent
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27/11/2022

https://www.theonlinecitizen.com/20...n-costs-sporean-public-more-than-s6b-in-2009/

SINGAPORE — It was reported that Mdm Ho Ching, wife of Singapore’s Prime Minister Lee Hsien Loong, has broken her silence over the write-down of the US$275 investment by Temasek Holdings due to the bad investment in the now defunct cryptocurrency FTX.
Mdm Ho who is the former Chief Executive Officer of Temasek for more than 18 years, wrote, “A loss is a loss, and always painful”. She added, “A loss in what may turn out to be a badly managed company without adult supervision is egg on our face.”
“I am glad that Temasek has made a clear decision to write down this investment to zero. This helps clear the head on what to do as a next step, without being blinkered by wishful thinking.”
However, she also said that some of Temasek’s best investments were made by being “contrarian”, although she did not name examples of such investments. “
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And Temasek can afford to be contrarian bcos it has its own balance sheet and can think long term,” she added. “With a long term stance, and all the pros and cons that come with that stance, Temasek is not fazed by the twiddles and sentiments of the market.”
Temasek in its statement on 17 November, noted that the sum of US$275 million that was written off was 0.09% of its net portfolio value of S$403 billion as of 31 March 2022.

Temasek Bets Wrongly On Merrill Lynch​

This is not the first time Temasek thinks it “can afford to be contrarian”. Contrarian investing means investing into assets on the “cheap” that go against the grain of market sentiment, hoping for the value of the assets to recover in the long run. This is because the value of those “cheap” assets acquired may just end up as zero.
Another good example of a failed contrarian strategy employed by Temasek during Mdm Ho’s reign was its bet on Merrill Lynch during the 2007-2008 subprime crisis in the United States.
Prior to the crisis, US financial institutions became highly leveraged, increasing their appetite for risky investments and reducing their resilience in case of losses. Much of this leverage was achieved using complex financial instruments such as off-balance sheet securitization and derivatives, which made it difficult for creditors and regulators to monitor.
US households and financial institutions became increasingly indebted or overleveraged during the years preceding the crisis. This increased their vulnerability to the collapse of the housing bubble ballooning in the US.
By 2008, the home mortgage debt relative to US GDP had increased to 73%, reaching US$10.5 trillion. The US household debt as a percentage of annual disposable personal income was 127% at the end of 2007. Many of these debts were securitized in a complex manner by Wall Street “gurus” and traded in the market.
From 2004 to 2007, the top five US investment banks each significantly increased their financial leverage, which increased their vulnerability at the same time. By 2007, these five institutions were over US$4.1 trillion in debt, about 30% of the US GDP.
One of these unfortunate five was Merrill Lynch. In November 2007, the troubled Merrill Lynch announced it would write down US$8.4 billion in losses associated with the subprime mortgage crisis.
In the next month December, Temasek jumped in with its “contrarian” approach to invest more than US$4 billion into Merrill Lynch thinking that it was buying on the cheap.
At the time, Manish Kejriwal, the senior managing director of investments at Temasek, said, “Our participation in this capital raising exercise is a vote of confidence for the management team, and the underlying strengths of Merrill Lynch’s franchise.” But analysts were already saying that more write downs from Merrill were to be expected.
About 7 months later in July 2008, Merrill announced US$4.9 billion fourth quarter losses for the company from defaults and bad investments in the ongoing mortgage crisis.
In the year between July 2007 and July 2008, Merrill lost US$19.2 billion or US$52 million daily. The company’s stock price tanked.
But Temasek doubled down by announcing that it would invest another close to US$1 billion into Merrill, raising its stake in the troubled company to more than 10 per cent despite the huge paper losses already incurred by Temasek.
As Temasek doubled down to buy more Merrill’s shares, Merrill disclosed that it would take a further US$5.7 billion in debt-related writedowns.
By September 2008, Temasek had increased its stake in Merrill Lynch to 13.7 per cent and became Merrill’s largest shareholder. Bloomberg reported that Merrill had lost US$51.8 billion on mortgage-backed securities in the subprime crisis, while stock broking firms downgraded its shares to “conviction sell” and warned of further losses in Merrill. And in the same month, Bank of America (BOA) also announced that it would buy Merrill Lynch in an all-stock deal.
After the acquisition of Merrill Lynch by BOA, Temasek decided to sell of its entire BOA’s stake, obtained from the stock-deal between Merrill and BOA. It sold off the BOA shares between January and March of 2009. Dow Jones Newswires estimated that Temasek had lost some $4.6 billion in its ill-fated “contrarian” venture to buy into the troubled Merrill Lynch.
Dow Jones, quoting sources who were familiar with the situation reported that Temasek sold the BOA shares for an average of US$7 a share, netting US$1.3 billion, but losing an estimated US$4.6 billion (S$6.3 billion) on the entire Merrill Lynch venture.
In other words, Temasek had invested a total of US$5.9 billion into Merrill — buying high and selling low. Ironically, Reuters reported in May 2009 that BOA shares had rallied more than 70 per cent after Temasek’s exit.
Contrarian investing is highly risky. The fact that a share has fallen is no guarantee that it is cheap, merely that it is cheaper than it was. Contrarian investing is not just ferreting around in the rubbish bins for what other investors aren’t interested in, because the assets might really turn out to be zero-value rubbish, after all, heading for the incinerators.
Perhaps the fund managers in Temasek can afford to take huge risks because, after all, they are not investing in their own money but that of the Singaporean public.

 

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Co-founder of Amber Group dies in sleep, 9 months after Temasek invested in it​

By
Correspondent
-
29/11/2022

https://www.theonlinecitizen.com/20...-sleep-9-months-after-temasek-invested-in-it/
Tiantian Kullander (Amber Group)
Tiantian Kullander, the influential co-founder of cryptocurrency company Amber Group, was found dead in his sleep last Wednesday (23 Nov 2022), the company confirmed. He was only 30 years old.
The company put out an obituary statement describing Kullander as a “respected thought leader and widely recognized pioneer for the industry”.
“His depth of knowledge, his willingness to collaborate and his desire to always help others benefited countless start-ups and individuals. His insights and creativity inspired many projects, people and communities,” it added.
The company also said that Kullander’s “legacy will live on and we will work even harder to make Amber the category-defining leader of our industry, as this was TT’s ambition and dream.”

Further details surrounding Kullander’s death were unavailable except that he died in his sleep.
Amber requests the public’s respect for the privacy of TT’s family during this difficult time.

Temasek invests in Amber Group

Nine months ago in February this year, Temasek Holdings was among the investors in a funding round that valued the cryptocurrency-trading platform Amber Group at US$3 billion.
A total of US$200 million was raised for the company but it wasn’t known how much Temasek had invested in the company.
Actually, the Amber Group was very keen to take up Temasek’s investment. It even extended its Series B funding round, originally announced in June last year, to this year specifically to bring Temasek on board as an investor.
“They (Temasek) are very strategic, so we made this special effort to bring them in,” a company spokesperson said.
With more investments, Amber wanted to do more hiring in Europe and the Americas.
Temasek has been actively dabbling in crypto investments lately. Two weeks ago, Temasek had just written off US$275 million due to a bad investment in the now-bankrupted cryptocurrency exchange FTX.
FTX is yet another crypto-trading platform touted to be the third-biggest crypto exchange in the world by trading volume. When FTX went bankrupt, Temasek blamed misplaced belief in the FTX founder for its failed investment
Later, Mdm Ho Ching, wife of Singapore’s Prime Minister Lee Hsien Loong, broke her silence over the US$275 write-off saying, “And Temasek can afford to be contrarian bcos it has its own balance sheet and can think long term.”
Kullander is the second young crypto whiz to shock the industry with his death in recent weeks.
Last month, 29-year-old Nikolas Mushegian, co-founder of the cryptocurrency lending platform MakerDAO and the decentralized Dai stablecoin, was found washed ashore on a Puerto Rican beach after an apparent drowning, just hours after tweeting about an alleged murder plot to take his life.

 

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Temasek’s portfolio is increased not just by its annual profits, but also transfers of funds and profitable companies from Singapore Govt​

By
Terry Xu
-
27/11/2022

https://www.theonlinecitizen.com/20...and-profitable-companies-from-singapore-govt/
Photo: bloombergquint.com
A common defence against criticism of the high-profile losses suffered by Temasek Holdings by some people online is to share a chart of its net portfolio spanning over the past two decades.
The shared chart shows how the Singapore sovereign wealth fund (SWF) had an initial portfolio of S$77 billion in 2002 and gradually increased to S$403 billion in 2022.

While the increasing figures do look impressive on paper but we have to note that this chart is not showing Temasek’s profit over the years but the value of its annual portfolio.
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If we were to show its portfolio alongside its annual profits, it does not seem as impressive as it should be. Given that one would expect a corresponding trend of increasing profit due to the larger portfolio possessed by Temasek.
A Flourish chart

Singapore Government’s Fund Injections Into Temasek​

Singapore’s past reserves are derived from an excess of domestic savings over investment and/or a government budget surplus.
According to data from Singstat, the Singapore Government has reported an annual average surplus of about S$20 billion based on International Monetary Fund standards.
These surpluses are then held and managed in three distinct pots: the Monetary Authority of Singapore (MAS), GIC, and Temasek.
“As shareholder in Temasek, the Government injects capital into the company taking into account the long-term returns and risks associated with such investment. These capital injections are reflected in Temasek’s accounts and are made public.” wrote the Ministry of Finance in its explainer.
We do not know how much the Singapore Government allocates to each entity each year but it is a fact that Temasek’s portfolio contains injections from the Singapore Government over the past decades.
And while the Government states that the capital injections are reflected in Temasek’s accounts, one finds it hard to identify what are the exact sums of its transfers.
The Singapore Government, however, points out that it does not transfer funds to Temasek or GIC to improve their performance figures.

Transfer Of Government Assets To Temasek​

One interesting aspect about some of Temasek’s assets is that they are often “sold” or “loaned” to the SWF at surprisingly low values.
Take Changi Airport for example which Temasek manages.
The Changi Airport Group (Singapore) Pte Ltd (CAG) was formed on 16 June 2009 and the corporatisation of Changi Airport followed on 1 July 2009.
Its revenue for the year was S$961 million, profit, after tax was S$227 million and total assets, were S$7.2 billion.
According to the CAG’s report for FY2009/2010, “the estimated consideration payable to CAAS (Civil Aviation Authority of Singapore) for the transfer of airport undertaking and other assets is $3,277,987,000.”
Also, the consideration will be funded via “a capital injection by the immediate holding entity, the Minister for Finance (Incorporated).”
While CAG is not transferred to Temasek as the Singapore Government still owns it, Temasek still runs the airport and benefits from its healthy profits — which does not make sense accounting-wise.
Other notable assets that are clearly profitable or monopolistic in nature that were sold or transferred in one way or another to Temasek, are Singtel, Singapore Technologies, Singapore Power (SP) Group which was privatised from the Public Utilities Board and PSA Corporation Ltd. Just to name a few.
To say that Temasek made a profit from its Singapore-based companies is much more believable than to suggest that it had profited from its high-profile investments overseas.
One has to also note the drop in Temasek’s portfolio in 2009 where it reported a profit of S$6.2 billion. From March 2008 to Dec 2008, Temasek sold three power stations in Singapore for a combined value of S$12.05 billion.
If not for the sale of the power stations to foreign consortiums, it might have seen red for the first time.

Private Equity In Temasek’s Portfolio Is Subjective​

Chris Kuan, a former banker commented in 2016 about Temasek’s method of accounting when CNA reported that Temasek had said the decrease reflects share price declines of its listed investments, which was offset by the performance of unlisted assets.
He wrote, “I find this statement problematic. It is not fully conceivable at least in my view that there is such a divergence between the change in values between listed and unlisted assets. If there is a general downturn in asset values and especially since Temasek admits to the volatility and difficult investment environment, then these conditions affect both listed and unlisted assets in more or less the same way, notwithstanding special circumstances that may result in some assets holding up or even appreciating compared to others.”
“Nevertheless, to find losses in listed assets being offset in a significant extent given the portfolio size by unlisted assets then the question that pops to mind is how robust are the valuation or the assumptions under the valuation of the unlisted assets since being unlisted there is no transparent, quantifiable market price for them?”
Under the Singapore Companies Act 1967, Temasek is an exempt private company and is not required to publish its statutory consolidated financial statements.
Referring to Mr Kuan’s observation and Temasek’s legal obligation to disclose its finances, one would risk a POFMA correction direction in questioning the valuation of Temasek’s assets due to the situation of asymmetric information.
While MOF states that Temasek’s financial performance is scrutinised by bond rating agencies, which have given it AAA rating and that its financial statements are audited by an international audit firm (KPMG in 2022), still, the lack of public transparency of its investments and salaries of its top executives on top of its high profile losses over the years have made it hard to believe the performance of the SWF.
The recent write-down of its US$275 million investment in bankrupted cryptocurrency exchange FTX has spurred Members of Parliament from the Workers’ Party to file parliamentary questions on whether the two SWFs should be included in the audit ambit of the Auditor-General’s Office and oversight by the Public Accounts Committee.
In any case, the next time someone shows you the chart of Temasek’s annual portfolio over the past twenty years as “proof” of its achievements, just ask them if they are aware of the points highlighted in this article.

 

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Temasek’s FTX write-off will not affect contribution to Singapore’s reserves: Lawrence Wong​

After writing off the FTX investment, Temasek’s early-stage portfolio as at March 2022 has generated an internal rate of return in the mid-teens over the last decade, said DPM Lawrence Wong. PHOTO: REUTERS

Claire Huang
Business Correspondent

Nov 30, 2022

SINGAPORE - Temasek’s US$275 million (S$377 million) investment loss in bankrupt cryptocurrency exchange FTX will not affect the stream of income from the reserves available for the Government’s Budget, or the Net Investment Returns Contribution (NIRC).
This is because the NIRC is tied to the overall expected long-term returns of Singapore’s investment entities and not to individual investments, said Deputy Prime Minister Lawrence Wong, who was replying to questions in Parliament on Wednesday.
He also said spillovers from the collapse of FTX to Singapore’s broader financial system and economy “will be very limited”.
“It is disappointing when there is a loss, as in the case of Temasek’s investment in FTX. Even more so because the loss arose from what turned out to be a very badly managed company and from possible fraud and mishandling of customer funds,” said Mr Wong, who is also Finance Minister.
“The fact that other leading global institutional investors like BlackRock and Sequoia Capital also invested in FTX does not mitigate this.”
The nature of investing is having to take risks, and no amount of due diligence and monitoring can completely eliminate such risks, he noted, adding that losses do not imply that the governance system is not working.
“What is important is that our investment entities take lessons from each failure and success, and continue to take well-judged risks in order to achieve good overall returns in the long term.

“In this way, we can continue to add to our national reserves, and provide a stable income stream to fund government programmes for a long time to come,” Mr Wong said.
After writing off the FTX investment, Temasek’s early-stage portfolio as at March has generated an internal rate of return in the mid-teens over the last decade, which is better than industry averages, he said.
Still, what happened with FTX has not only caused a financial loss to Singapore’s investment company, but also reputational damage, Mr Wong said.

He added that Temasek has started an internal review by an independent team that is “separate from the investment team” and will report findings to the board.
When asked about this by Leader of the Opposition Pritam Singh (Aljunied GRC), DPM Wong said the internal review is a step up from the usual review procedure, and it will study and improve Temasek’s processes, as well as to draw lessons for the future.
The Government will not rule out getting an external auditor to look into the matter, but it will be for “something that we feel has gone wrong within the organisation, possibly, there might be negligence, there might be fraud, there might be misconduct”, said Mr Wong.
Temasek and sovereign wealth fund GIC have some investments in the digital asset space, but Mr Wong said they do not have direct exposure to cryptocurrencies.

Temasek had pumped money into FTX across two funding rounds from October 2021 to January, while GIC is an investor in a group that has ties to troubled crypto broker Genesis Trading. GIC had told The Straits Times it expects volatility in investments to stay high in the short term.
Mr Wong said the Government does not prescribe guidelines to statutory boards, Temasek, GIC and the Monetary Authority of Singapore (MAS) on the allocation of specific assets or asset classes, be it for cryptocurrencies or other assets.
Statutory boards have the flexibility to invest their surpluses and typically do this through external fund managers.
For Singapore investment entities, the Government sets out its risk tolerance limits; monitors for appropriate diversification in asset classes, sectors and geographies; and ensures that downside risks are not excessive.
“Ultimately, the Government holds the boards and management teams responsible for formulating investment strategies in accordance with the Government’s overall risk tolerance,” the minister said.
Noting that some MPs have called for more guidelines and safeguards over the investments made by Temasek and GIC, Mr Wong said the governance structures now in place “are already more extensive than those of a typical company”.
Temasek is audited by commercial auditors while GIC, which manages public funds, is audited by the Auditor-General.
“As Fifth Schedule entities, both Temasek and GIC are subject to the President’s oversight of their budgets and key appointments,” Mr Wong said, adding that questions about the entities’ performance are answered by the Finance Ministry in Parliament.
Thus, there is no need for additional audit requirements or parliamentary committees, he said. “Instead, we should insulate the boards from political pressures. Let them do their work, carry out their responsibilities, and fulfil their investment mandates commercially and professionally.”

Mr Wong told Parliament that Singapore has drawn “a sharp distinction between growing an innovative and responsible digital asset ecosystem and speculation in crypto”, which the authorities have actively discouraged for retail investors.
FTX, he noted, is not the first crypto platform to collapse, nor will it be the last.
Even if a crypto company is well managed, cryptocurrencies themselves are highly volatile and have no intrinsic value, he said. “Those who trade in cryptocurrencies must be prepared to lose all their value. No amount of regulation can remove this risk.”
Mr Wong also touched on MAS’ recent statements, saying the regulator cannot possibly provide in its Investor Alert List (IAL) an exhaustive list of all the unsafe or unlicensed entities that exist in the world.
The IAL is meant to warn the public of entities that may be mistakenly viewed to be regulated by MAS, especially those that solicit Singapore customers without the required licence, he said.
To strengthen safeguards, MAS has plans to introduce measures that will have digital payment token providers that are licensed in Singapore set up a risk awareness test to evaluate retail customers, as well as separate customers’ assets from their own to prevent the lending out of customers’ money.

 

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Sounding a timely note of caution on cryptocurrencies amid FTX crash​

Notwithstanding investment losses, the long-term performance of S’pore’s investment entities is still healthy. As for retail investors, the old adage applies: Do not put all of your eggs in one basket.​

Grace Ho
Insight Editor

FILE PHOTO: The logo of FTX is seen at the entrance of the FTX Arena in Miami, Florida, U.S., November 12, 2022. REUTERS/Marco Bello/File Photo REUTERS

Dec 1, 2022

Many experts have been predicting an extended crypto winter, especially after the epic flameout of TerraUSD and Luna in May. But hardly anyone saw this coming: the spectacular collapse of cryptocurrency exchange FTX, which turned out to be a massive fraud.
Last year’s Crypto.com sales pitch, intoned by actor Matt Damon, now seems almost anachronistic: “History is filled with almosts. With those who almost adventured, who almost achieved, but ultimately for them it proved to be too much. Then there are others. The ones who embrace the moment and commit... They calm their minds and steel their nerves with four simple words that have been whispered by the intrepid since the time of the Romans: Fortune favours the brave.”
What Damon failed to mention was that the first person to utter “fortune favours the brave” did not live long enough to experience good fortune. When Mount Vesuvius erupted in AD79 and destroyed the city of Pompeii, a Roman naval commander by the name of Pliny the Elder ignored the advice of his men and steered directly towards the volcano, hoping to pull off a miraculous rescue.
But he breathed in the thick fumes and died before saving anyone. The last known detail about him is that he was seen leaning on two slaves and trying to stand, with little success.
Hoping to minimise the risk of crypto investors’ fortunes going up in smoke is the Government. On Wednesday, Deputy Prime Minister and Finance Minister Lawrence Wong warned Singaporeans that even if a cryptocurrency platform is well managed, cryptocurrencies themselves are highly volatile and have no intrinsic value.
“Those who trade in cryptocurrencies must be prepared to lose all their value. No amount of regulation can remove this risk,” he told Parliament, adding that the Monetary Authority of Singapore (MAS) has consistently warned since 2017 that dealing in cryptocurrencies is hazardous.
Arising from Temasek’s US$275 million (S$377 million) investment loss in FTX, the supplementary questions from MPs centred on risk management and tolerance, stress testing, regulations, disclosure and the impact on retail customers.

To Ms Tin Pei Ling’s (MacPherson) question on whether FTX was the only cryptocurrency-related investment that Singapore’s investment company Temasek, sovereign wealth fund GIC and MAS were exposed to, Mr Wong replied that GIC and Temasek have exposures to new technologies and early-stage companies, and these investments are within the overall context of the risk parameters set out by the Government. Temasek’s present exposure to early-stage companies is about 6 per cent of its overall portfolio.
There will be other companies in the digital asset space that GIC and Temasek have invested in, but they are within these limited parameters, said Mr Wong. “And so if you talk about concerns of a broader fallout, I think it would be relatively contained.”
To Mr Saktiandi Supaat’s (Bishan-Toa Payoh GRC) question on whether investment entities build into stress test scenarios the risk of cryptocurrencies and digital assets blowing up, Mr Wong gave the assurance that such scenarios are taken into account. This is not just for MAS and the financial sector, but also for the Government’s overall investment portfolio.

Mr Gerald Giam (Aljunied GRC) posed two questions: the risk tolerance levels spelt out to Temasek, GIC and MAS and whether they are published anywhere; and if the President has any say in the setting of their investment parameters, mandates, objectives or risk tolerance levels.
Mr Wong reiterated that the Government does not decide on or micromanage investments, nor does it prescribe asset classes or assets. But it has a role in appointing board members and senior management, and holds them accountable for delivering good long-term performance.
“The President is part of this governance process too because she, in terms of the appointments of people, has the powers as well,” he said, adding that there are processes and risk metrics to monitor, as well as clear accountabilities.
The amount of risk that the Government has set out for GIC is expressed in its reference portfolio, which is made up of 65 per cent global equities and 35 per cent global bonds. Mr Wong noted that it is different in Temasek’s case because it is largely an equities investor, but it puts out in its annual review some of its risk considerations and its risk parameters.

One question that received ample airing was Mr Leon Perera’s (Aljunied GRC), on why GIC is subject to audits by the Auditor-General’s Office but Temasek is not, when both manage public funds.
Mr Wong observed that it is not unusual for private auditors to audit public agencies, whereas the Auditor-General has a remit largely within the public service and government ministries.
“For some stat boards, for a commercial entity like Temasek which also within it has a portfolio of listed entities, well, I think we should let commercial auditors do their job,” he said, adding that if there are good reasons, the Government will have “no hesitation” about asking the Auditor-General to go in to do a full audit.
He also replied to Workers’ Party chief Pritam Singh (Aljunied GRC), saying that Temasek’s internal review would be led by people who are separate from the investment team that made the FTX decision.
“So they will be separate, they will not be clouded by what steps were taken, and they will report directly to the board,” he said.
For retail investors, the main takeaway is this: There will be some basic investor protection measures for digital payment token (DPT) service providers that are licensed in Singapore. These include administering a risk awareness test, segregating customers’ assets from their own assets, and refraining from operating a trading platform while simultaneously taking proprietary positions from their own accounts.

But MAS cannot prevent DPT service providers from failing or customers from suffering losses, a point that Mr Wong took pains to emphasise several times on Wednesday. Also, even the most comprehensive system in Singapore will not stop some Singaporeans from accessing overseas crypto investment platforms online.
FTX’s bankruptcy filings have described a governance mess, with the crypto exchange deeply tied up with former chief executive Sam Bankman-Fried’s trading firm. Yet, thanks to almost messianic boosterism and Fomo (fear of missing out), retail and institutional investors showered FTX with love and cash in spite of multiple red flags – from its countries of incorporation and operation, to its inexperienced team and skeletal board.
Any lapses on the part of institutional investors in conducting their due diligence should rightly be investigated. But to those who expect perfect information and zero losses, consider this too: If market manipulation is already a problem with stocks which are highly regulated and widely understood, how much worse is the problem with crypto, where almost every asset is new and there is even less transparency?
Mr Wong assuaged the members’ anxieties and stressed the need to look at the bigger picture, saying that the Government evaluates investment entities based on their long-term performance, and their track records show that they have performed creditably even in challenging environments.
“What is important is that our investment entities take lessons from each failure and success, and continue to take well-judged risks in order to achieve good overall returns in the long term,” he said.
He also noted that Temasek’s FTX loss will not affect the stream of income from the reserves available for the Government’s Budget or the Net Investment Returns Contribution (NIRC), because NIRC is tied to the overall expected long-term returns of Singapore’s investment entities, and not to individual investments.
As for retail investors, the old adage applies: Do not put all of your eggs in one basket. Another line should be added to this: Never jump in just because an established institutional investor has invested in a company; and be very, very wary of investing in crypto.

 

[LITTLEREDDOT]

Vistara-Air India merger to see SIA get 25.1 per cent stake for $360m​

Tata currently holds 51 per cent of Vistara, while SIA has 49 per cent. PHOTO: REUTERS

Ven Sreenivasan
Associate Editor


NOV 29, 2022

SINGAPORE - The widely anticipated merger of Indian airline Vistara into Air India will see Singapore Airlines (SIA) getting a 25.1 per cent stake in the enlarged entity for an additional investment of $360 million.
The Tata Group will remain the bigger partner in Air India post-merger, with a 74.9 per cent stake.
Tata currently holds 51 per cent of Vistara, while SIA has 49 per cent.
SIA’s capital injection into the new Air India group could rise by another 50.2 billion rupees (S$880 million) if the Indian carrier decides to tap both its shareholders for additional funds for restructuring and expansion. This amount is payable only after the completion of the merger in March 2024. The actual amount will be dependent on factors that include the progress of the enlarged Air India’s business plan, and its access to other funding options.
The exact amount of additional investment by each partner will be calibrated to maintain the 25.1 per cent-74.9 per cent respective stakeholdings of the two parties.
SIA will fund its investment from internal sources, which include $17.5 billion in cash and bank balances, and $2.2 billion in committed lines of credit.
SIA and Tata together initially invested about $100 million to start up the Vistara venture in 2013.

But over the years, based on SIA’s own annual reports, the Singapore carrier has invested some $900 million in the Vistara project.
With the latest additional $360 million in Air India, SIA would have invested almost $1.3 billion in its India airline venture. This could rise to as much as $2.1 billion, should it have to provide funds for the enlarged Air India.
The announcement on Tuesday evening confirms long-held market speculation that Tata would ultimately merge all its airline holdings into Air India and Air India Express, which it bought from the Indian government earlier this year after 69 years of state control.


This means that besides Vistara, it will also merge its 87 per cent-held AirAsia India into the Air India group’s low-cost carrier Air India Express.
With this, the Tata-SIA partnership will control one of India’s largest airline groups, with a 23 per cent market share and straddling both the full-service and low-cost spectrum of air travel.
The combined entities of Air India and Air India Express will have 218 aircraft, serving 52 domestic destinations and 38 international destinations. Only IndiGo Airlines would have more domestic routes.
Vistara, which is rated India’s best airline, operates on 31 domestic routes and flies to 10 international destinations, including Singapore.
SIA said the merger would reinforce its presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in a large and fast-growing aviation market.
Mr Goh Choon Phong, SIA chief executive, said Tata Sons, parent company of the Tata Group, is one of the most established and respected names in India.
“Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time,” he said.
“With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market. We will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage.”
India is the world’s third-largest aviation market, with air travel demand surging and passenger traffic expected to more than double over the next 10 years.
But it also remains underserved, with low international seats per capita, signifying significant growth potential.

Aviation consultancy Endau Analytics’ founder and chief executive Shukor Yusof said the $360 million is a small and affordable price for SIA to pay to have a foothold in the vast Indian market.
“Plus, SIA retains board representation in Air India,” he said. “But the challenge between now and March 2024, when the deal is completed, is whether global aviation would have weakened as a result of a recession. Then SIA would have to decide if it makes sense to inject another $880 million to be part of the Air India group.”
Observers also note the risk arising from failure of the ongoing Air India restructuring process.
Heading Air India is former SIA veteran Campbell Wilson. He is currently leading a multi-year business transformation of the Air India group, which includes improving service delivery and reliability, talent acquisition, adopting more technology and innovation, commercial efficiency and profitability, and fleet upgrading.
The airline aims to capture 30 per cent of the domestic market share while further growing its international connectivity.

 

[LITTLEREDDOT]

Temasek-backed crypto group Amber says ‘business as usual’ amid staff cuts​

Amber Group says “business as usual”, even as it reportedly moves to cut headcount while raising funds amid the fallout of FTX. ST PHOTO: GAVIN FOO

Claire Huang
Business Correspondent

DEC 7, 2022

SINGAPORE - Temasek-backed digital asset trading platform Amber Group says it is “business as usual”, even as it reportedly moves to cut headcount while raising funds amid the fallout of crypto exchange FTX.
The Singapore-based crypto group declared in a series of tweets on Tuesday that operations at the group and its platform WhaleFin “are business as usual”. Its managing partner Annabelle Huang tweeted that withdrawals are “open as usual”.
“Weathering through market cycles, we have to constantly adjust and pivot our business strategies, product offerings, and, as a result, internal teams and functions,” it said, in an apparent reference to reports about its downsizing in China.
Hours before Amber’s tweets, crypto media outlet TechFlowPost said on Twitter that about 100 former employees who were let go by Amber in November did not get any compensation, and that its offices in China were emptied on Monday, with the office management uncontactable.
In a separate tweet by Wu Blockchain, Hong Kong-based Chinese reporter Colin Wu said the group had axed “hundreds of people again in December, and asked Chinese employees to work from home and clear their offices, according to former employees”.
The tweet said the latest layoffs came on the back of the September round, when Amber cut “30 to 40 per cent”.
Bloomberg reported in September that the group had cut as much as 10 per cent of its staff.

During 2021’s crypto bull run, the company grew rapidly to around 900 employees, from a team of 200 to 300.
On its LinkedIn page, Amber said it was founded in 2015, has at least 1,000 staff and global offices including in Singapore, Hong Kong, Dubai, Tokyo, Geneva and London.
The group was set up by five former Morgan Stanley traders and has seen its valuation triple since mid-2021.
The job cuts come as Amber looks to raise a little over US$100 million (S$136 million) in fresh funding at a US$3 billion valuation. It was reported in May 2022 to be seeking funds at a US$10 billion valuation.
Amber counts Singapore state investor Temasek, Sequoia China, Pantera Capital and Tiger Global Management as backers.

Temasek, which also backed FTX, was among investors in a US$200 million funding round that valued Amber at US$3 billion.
In a tweet on Nov 10, Amber said it has no exposure to Alameda or FTT – FTX’s native token. But it noted that like most other trading firms, it has been “an active trading participant on FTX”, which “represents less than 10 per cent of our total trading capital”.
Cypto firms have been laying off staff in recent months, with exchange Kraken among the most recent. It said at end November that it has plans to cut about 1,100 employees or 30 per cent of headcount, mainly as trading volumes have fallen “significantly” while new customer accounts have not grown as fast.
Others that have made job cuts in recent months include platforms Bybit, Coinbase and Crypto.com.

 

[LITTLEREDDOT]

Temasek-backed crypto group Amber to end Chelsea FC sponsorship, axe over 40% of jobs in FTX fallout​

The sponsorship deal with Chelsea FC was reported to be worth £20 million (S$33 million) a year. PHOTO: REUTERS

DEC 9, 2022

SAN FRANCISCO - Amber Group, one of Asia’s leading crypto trading and lending platforms, is cutting jobs, scrapping retail operations and terminating a sponsorship deal with Chelsea Football Club in the latest retrenchment to hit the digital-asset sector.
The decisions are part of a major cost-cutting strategy, according to a source familiar with the matter, who asked not to be identified discussing private information.
The Singapore-based crypto company, whose backers include Temasek and Sequoia China, will slash its workforce to less than 400 from about 700, the source said, adding that staff numbers earlier peaked at about 1,100.
The moves by Amber are just the latest indication of the diminished outlook for virtual assets following the spectacular bankruptcy of Sam Bankman-Fried’s FTX exchange and sister trading house Alameda Research a month ago.
Amber will now focus on large institutions, family offices and wealthy individuals, the source said, adding that customer numbers will fall to about 100 from the hundreds of thousands, because of the exit from the retail sector.
The company in recent days has rebutted online speculation that it may be the next domino to fall after a series of blow-ups in the crypto sector, which is reeling from a US$2 trillion (S$2.7 trillion) rout. A top executive tweeted on Wednesday that the company is conducting “business as usual”.
Amber plans to move to a cheaper office space in Hong Kong, while some smaller offices in other regions will most likely be shuttered, with remaining employees allowed to work from home, the source said.

Chelsea FC and Amber announced a partnership in May that included displaying the logo for Amber’s WhaleFin trading platform on the sleeves of the team’s jersey during the 2022 to 2023 season.
The sponsorship deal was reported to be worth £20 million (S$33 million) a year. The source said Amber was going through the legal process of ending the agreement.
Amber was launched in 2018 by a group of founders that included former Morgan Stanley traders and raised US$200 million at a US$3 billion valuation in February. Bloomberg News reported earlier this week that Amber had put fund raising for US$100 million on hold.
One of the company’s co-founders, Mr Tiantian Kullander, died unexpectedly in his sleep in November at the age of 30. BLOOMBERG

 

[LITTLEREDDOT]

Keppel O&M to pay $88 million in settlement of Brazil corruption charges​

Keppel reiterates its zero tolerance of corruption and its ongoing commitment to ethical practices across its global operations. PHOTO: LIANHE ZAOBAO
Michelle Zhu

Dec 20, 2022

SINGAPORE - Keppel Corp’s offshore and marine (O&M) unit has committed to pay a total of 343.6 million reais (S$88 million) in fines and damages to the Brazilian Federal Treasury and oil giant Petrobras, in relation to corrupt payments made by a former agent of Keppel O&M in Brazil.
This results from an additional leniency agreement reached with the Brazilian authorities, after Keppel engaged in a separate negotiation process following the conclusion of its 2017 leniency agreement with the Public Prosecutor’s Office in Brazil, or Ministerio Publico Federal (MPF).
The Brazilian authorities involved are the Attorney-General’s Office (AGU) and Comptroller General of the Union (CGU).
As part of the 2017 global resolution, the Attorney-General’s Chambers of Singapore (AGC) and the Corrupt Practices Investigation Bureau (CPIB) had previously agreed for Keppel O&M to pay a balance sum of about US$52.8 million (S$71.5 million) within three years from the date of CPIB’s conditional warning issued in 2017.
The AGC and CPIB subsequently extended the credit period to March 23, 2023, in the light of Keppel O&M’s then ongoing discussions with CGU and AGU. They have also agreed, in principle, to allow Keppel O&M to seek crediting of up to about US$52.8 million in fines payable by Keppel O&M to the Brazilian authorities.
On Monday, Keppel said the additional leniency agreement concludes the group’s negotiations in Brazil related to Keppel O&M’s former agent in the country.
It also resolves CGU’s administrative enforcement procedure against Keppel O&M and several of its other entities, which have been suspended since 2020 amid the ongoing discussions.

Keppel O&M said it does not expect further grounds for liability in Brazil related to the corruption case, as the earlier leniency agreement with the MPF and the additional leniency agreement provide for the payment of fines and damages in connection to the same matter.
It said it has also committed to continuing cooperation with AGU and CGU, and to ongoing compliance enhancements. The group “reiterates its zero tolerance of corruption and its ongoing commitment to ethical practices across its global operations”, it added.
The latest development is not expected to have a material impact on Keppel Corp’s net tangible assets and earnings per share for the current financial year.
Shares of Keppel Corp closed at $7.22 on Tuesday. THE BUSINESS TIMES

 

[LITTLEREDDOT]

Singapore's competition watchdog flags concerns over Tata group's takeover of Air India​

Air India and Vistara are key market players along overlapping air passenger and air cargo transport routes. PHOTO: AFP
Kelly Ng


JUN 3, 2022


SINGAPORE (THE BUSINESS TIMES) - Singapore's Competition and Consumer Commission (CCCS) has raised anti-competition concerns over the takeover of Air India by the Tata group.
The commission noted that Air India and Vistara, a joint venture between Singapore Airlines and Tata group's principal investment holding company Tata Sons, are 2 of the 3 key market players along overlapping air passenger and air cargo transport routes.
These include the provision of international air passenger transport services along direct flights on the Singapore-Mumbai and Singapore-Delhi routes, as well as the provision of air cargo transport services from Singapore to India.
"Both airlines are likely to be each other's close, if not the closest, competitor," CCCS said in a media statement on Friday (Jun 3).
CCCS had in January accepted an application from Talace, a Tata Sons subsidiary incorporated solely for the takeover of India's national carrier, for a decision on whether the takeover infringes a section of the Competition Act 2004, which prohibits mergers that have resulted or may be expected to result in a "substantial lessening of competition" within any market in Singapore.
The commission has at this point completed the first phase of its review.
In its statement, CCCS said third party feedback also suggests the presence of Singapore Airlines as a significant competitor of Air India and Vistara along overlapping passenger and cargo transport routes, but that it needs to further assess the extent to which Singapore Airlines competes with the merged entity along these routes.

CCCS said it also needs to further assess whether the "competitive constraint" from other airlines, such as IndiGo, would be sufficient post-transaction.

 

[LITTLEREDDOT]

Vistara-Air India merger to see SIA get 25.1 per cent stake for $360m​

Tata currently holds 51 per cent of Vistara, while SIA has 49 per cent. PHOTO: REUTERS

Ven Sreenivasan
Associate Editor


NOV 29, 2022

SINGAPORE - The widely anticipated merger of Indian airline Vistara into Air India will see Singapore Airlines (SIA) getting a 25.1 per cent stake in the enlarged entity for an additional investment of $360 million.
The Tata Group will remain the bigger partner in Air India post-merger, with a 74.9 per cent stake.
Tata currently holds 51 per cent of Vistara, while SIA has 49 per cent.
SIA’s capital injection into the new Air India group could rise by another 50.2 billion rupees (S$880 million) if the Indian carrier decides to tap both its shareholders for additional funds for restructuring and expansion. This amount is payable only after the completion of the merger in March 2024. The actual amount will be dependent on factors that include the progress of the enlarged Air India’s business plan, and its access to other funding options.
The exact amount of additional investment by each partner will be calibrated to maintain the 25.1 per cent-74.9 per cent respective stakeholdings of the two parties.
SIA will fund its investment from internal sources, which include $17.5 billion in cash and bank balances, and $2.2 billion in committed lines of credit.
SIA and Tata together initially invested about $100 million to start up the Vistara venture in 2013.


But over the years, based on SIA’s own annual reports, the Singapore carrier has invested some $900 million in the Vistara project.
With the latest additional $360 million in Air India, SIA would have invested almost $1.3 billion in its India airline venture. This could rise to as much as $2.1 billion, should it have to provide funds for the enlarged Air India.
The announcement on Tuesday evening confirms long-held market speculation that Tata would ultimately merge all its airline holdings into Air India and Air India Express, which it bought from the Indian government earlier this year after 69 years of state control.

This means that besides Vistara, it will also merge its 87 per cent-held AirAsia India into the Air India group’s low-cost carrier Air India Express.
With this, the Tata-SIA partnership will control one of India’s largest airline groups, with a 23 per cent market share and straddling both the full-service and low-cost spectrum of air travel.
The combined entities of Air India and Air India Express will have 218 aircraft, serving 52 domestic destinations and 38 international destinations. Only IndiGo Airlines would have more domestic routes.
Vistara, which is rated India’s best airline, operates on 31 domestic routes and flies to 10 international destinations, including Singapore.
SIA said the merger would reinforce its presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in a large and fast-growing aviation market.
Mr Goh Choon Phong, SIA chief executive, said Tata Sons, parent company of the Tata Group, is one of the most established and respected names in India.
“Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time,” he said.
“With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market. We will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage.”
India is the world’s third-largest aviation market, with air travel demand surging and passenger traffic expected to more than double over the next 10 years.
But it also remains underserved, with low international seats per capita, signifying significant growth potential.

Aviation consultancy Endau Analytics’ founder and chief executive Shukor Yusof said the $360 million is a small and affordable price for SIA to pay to have a foothold in the vast Indian market.
“Plus, SIA retains board representation in Air India,” he said. “But the challenge between now and March 2024, when the deal is completed, is whether global aviation would have weakened as a result of a recession. Then SIA would have to decide if it makes sense to inject another $880 million to be part of the Air India group.”
Observers also note the risk arising from failure of the ongoing Air India restructuring process.
Heading Air India is former SIA veteran Campbell Wilson. He is currently leading a multi-year business transformation of the Air India group, which includes improving service delivery and reliability, talent acquisition, adopting more technology and innovation, commercial efficiency and profitability, and fleet upgrading.
The airline aims to capture 30 per cent of the domestic market share while further growing its international connectivity.

 

[LITTLEREDDOT]

Police arrest ex-bank executive for urinating on passenger during Air India flight​

Mr Shankar Mishra was on the run from the authorities after an elderly woman complained about the November incident. PHOTO: LINKEDIN

JAN 7, 2023

NEW DELHI - A sacked executive of United States banking giant Wells Fargo accused of urinating on a fellow passenger aboard an Air India flight has been arrested, a police spokesman said on Saturday.
Mr Shankar Mishra, the former vice-president of the bank’s Indian operations, was on the run from the authorities after an elderly woman complained about the November incident to the airline’s management.
Media reports said Mr Mishra had switched his phone off but remained in touch with his friends over social media and made a credit card transaction in India’s IT capital Bangalore, which gave away his location. He was being taken to capital New Delhi where police are investigating the allegations, the reports said.
A police spokesman in Delhi confirmed Mr Mishra’s arrest to AFP without giving any other details.
Wells Fargo said on Friday that its employee had been sacked after the “deeply disturbing” allegations came to light.
Mr Mishra was reportedly drunk during the journey from New York to New Delhi on Nov 26 when he allegedly unzipped his pants and urinated on a 72-year-old woman seated in business class.
The woman wrote a letter of complaint to Air India’s group chairman a day after the incident about “the most traumatic flight” she had ever experienced.


She said although she was offered a set of pyjamas and slippers after informing the crew that her clothes and shoes were soaked in urine, she was told to return to her seat after it was cleaned.
When she refused to return to the soiled seat, which was covered with sheets but still reeked of urine, she was offered a crew seat for the rest of the flight.
“I subsequently learnt from a fellow passenger that several seats were available in first class and he suggested to the crew that I be moved into one of those rather than being forced to sit in a soiled seat,” she wrote.

“Clearly, the crew did not feel that taking care of a distressed passenger was a priority.
“At the end of the flight, the staff told me they would get me a wheelchair to ensure that I clear customs as early as possible. However, the wheelchair deposited me at a waiting area, where I waited for 30 minutes, and nobody came to get me.
“I finally had to clear customs on my own and collected the luggage by myself – all in Air India pyjamas and socks,” she wrote.
The offender reportedly left the airport without facing any action upon landing. Air India filed a police complaint only on Jan 4 as it felt both sides had “settled the matter”, NDTV reported.
The victim described that she was “stunned” when Mr Mishra was brought before her by the flight crew and begged for her forgiveness, even though she had told them she wanted him arrested and did not wish to see him. The airline also gave Mr Mishra her contact number.
MORE ON THIS TOPIC
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Air India said it had failed to properly address the incident and was reviewing its policy on serving alcohol during flights.
It has also issued “show cause” notices and de-rostered one pilot and four cabin crew members who were on the flight, Air India chief executive and managing director Campbell Wilson said in a statement on Saturday.
“Air India acknowledges that it could have handled these matters better, both in the air and on the ground, and is committed to taking action,” he said.
The airline added that it will provide full cooperation to the affected passenger, regulators and law enforcement authorities, and is “committed to providing a safe environment for customers and crew, as well as operating in full compliance with all laws and regulations”.
The airline, recently bought by the Tata Group conglomerate after decades under state control, has faced severe criticism for its handling of the woman’s complaint.
India’s aviation regulator last week admonished its management for not reporting the incident at the time. AFP, REUTERS

 

[LITTLEREDDOT]

Gemini and Genesis charged in US over crypto lending programme​

The SEC said Gemini and Genesis illegally raised billions of dollars from investors through the so-called Gemini Earn programme. PHOTO: REUTERS

JAN 13, 2023

WASHINGTON – The United States Securities and Exchange Commission (SEC) on Thursday charged cryptocurrency lender Genesis Global Capital and crypto exchange Gemini Trust with offering unregistered securities through a programme that promised investors high interest on deposits.
The SEC said that Genesis, a subsidiary of Digital Currency Group (DCG), and Gemini, which is run by crypto entrepreneur twins Tyler and Cameron Winklevoss, had raised billions of dollars of assets from hundreds of thousands of investors without registering the programme called Gemini Earn.
By doing so, Genesis and Gemini bypassed “disclosure requirements designed to protect investors”, SEC chair Gary Gensler said in a statement. He added that the charges should “make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws”.
Genesis later froze withdrawals. About 340,000 Earn customers are out about US$900 million (S$1.2 billion) in crypto assets, the SEC said.
The SEC’s action against Genesis and Gemini is part of the fallout of cryptocurrency markets melting down last year. A crash in the prices of cryptocurrencies like Bitcoin last spring led to a domino effect, with crypto hedge funds such as Three Arrows Capital and other crypto companies declaring bankruptcy. In November, FTX, a major cryptocurrency exchange run by Sam Bankman-Fried, also collapsed after the crypto equivalent of a bank run.
In the wake of these failures, regulatory scrutiny of crypto companies has heightened.
In its complaint on Thursday, the SEC said that Genesis partnered with Gemini on the programme, which let customers earn high interest on assets they lent to Genesis. Gemini facilitated the transactions, the SEC said, pooling customer assets and transferring them to Genesis. In return, Gemini deducted an agent fee of as high as nearly 4.3 per cent from the returns that Genesis paid to Gemini Earn investors.

Both companies, along with Genesis’ parent company, DCG, had much to gain from the endeavour, the SEC said. Genesis lent about US$575 million in crypto – some belonging to Gemini Earn investors – to DCG, according to the complaint.
After FTX imploded in November, Genesis froze withdrawals, leaving Gemini Earn customers stranded, according to the complaint.
Gemini has recently been unsuccessfully negotiating with Genesis and DCG for the release of Earn customer assets. The negotiations have come to a standstill in recent weeks, with the Winklevosses publicly accusing DCG of stalling to keep funds that belong to its customers.
The Winklevosses said DCG and Genesis have misrepresented financial information and mischaracterised the value of company assets to give the impression that Genesis was in better health than it was. DCG founder and chief executive Barry Silbert disputed the allegations in a letter to shareholders this week.
DCG raised US$700 million in November 2021 from prominent investors, including Singapore’s GIC.
Gemini Earn is not the first crypto lending programme that the SEC has cracked down on. Last year, the agency reached a US$100 million settlement with now-bankrupt crypto lender BlockFi. In 2021, the agency also blocked crypto exchange Coinbase, which abandoned its plans to start a yield product.
In June, the Commodity Futures Trading Commission (CFTC) filed a civil case against Gemini that claimed the crypto firm misled regulators in 2017 about its plans for a Bitcoin futures product. The CFTC said Gemini “made false or misleading” statements during the regulatory review process.
Some Earn customers have filed arbitration cases against Gemini over their frozen assets, with others lining up for a proposed class action suit, which was filed last month. The lawsuit, like the SEC’s case, said Earn was an unregistered securities offering and that investors were owed more information about the risks associated with the accounts.
This week, Gemini filed an answer to that lawsuit, arguing that it should be aimed at Genesis and DCG. Gemini also disavowed any responsibility for the frozen withdrawals, arguing that customers technically cut a deal with Genesis and not Gemini. NYTIMES

 

[Singapore Dancing Spirit]

Gemini and Genesis charged in US over crypto lending programme​

The SEC said Gemini and Genesis illegally raised billions of dollars from investors through the so-called Gemini Earn programme. PHOTO: REUTERS

Bitcoin’s epic rise and fall in 2018 and proved just how volatile cryptocurrencies can be when FTX collapsed once for all. It triggered a flurry of news articles that questioned if Bitcoin could survive such a crash. And if so, would anyone invest in it again?

The biggest players in this space know that the way to restore legitimacy, and gain more widespread adoption, is attracting more traditional institutions. But these institutions have two main concerns: regulation and management. They want investments are federally compliant and handled transparently. That’s where Gemini comes in. It’s a US dollar-backed cryptocurrency that is overseen by the New York State Department of Financial Services, adding legitimacy and making it attractive to traditional financial institutions.

What is Gemini?​

Gemini is an exchange where customers can trade US dollars for cryptocurrencies – including bitcoin, Litecoin, Ether, and Zcash. It is also a licensed custodian similar to FTX , meaning it can store digital assets on behalf of customers. FTX’s Collapse Once Again Highlights the Dangers of Custodial Wallets

Who created GEMINI?​

As the name suggests, Gemini is a CECA name and Indian diaspora must be behind this SAGA too. Gemini is the brainchild of the Winklevoss twins – yes, the ones who famously got $65 million out of Facebook's Mark Zuckerberg for stealing the idea for Facebook.

The billionaire twins invested some of that payout into bitcoin, got even more richer, and created their own exchange. They noticed in 2014 that US institutions wanted to invest in bitcoin but were blocked because of US law. So, they worked to get the blessing of regulatory departments and became a New York trust company – a business bound by New York Banking Law.

They said their ability to embrace cryptocurrency with regulatory financial compliance was a “bridge between the old world of money and the new world of money.”

A brief history​

• 2014 – Gemini platform announced
• January 2015 – Launched in the United States
• October 2015 – Was issued a trust charter from the New York State Department of Financial Services
• October 2016 – Expanded into Asia
• September 2018 – Gemini dollar (GUSD) launched

Gemini Crypto News: Exchange’s Clash with Genesis Reaches a Boiling Point​

For Genesis, the clock is ticking away. The company must act quickly to recover the user funds.

• Crypto brokerage Genesis could be in deep trouble, as recent news foreshadows.
• Gemini, which partnered with Genesis and has clients that are owed hundreds of millions of dollars, is putting pressure on the company to pay back its debts.
• A slate of Gemini users has launched a class-action lawsuit against Genesis and its parent company.

To be continued....

 

[LITTLEREDDOT]

Temasek-backed Zilingo, which fired CEO Ankiti Bose, to be liquidated: Sources​

Zilingo, a once high-flying company, pitched into a downward spiral after complaints of financial irregularities. PHOTO: ZILINGO

Jan 20, 2023

SINGAPORE – Singapore’s Zilingo is set to enter liquidation, capping a months-long crisis that shocked Asia’s technology and start-up industries.
The fashion-tech company’s board appointed EY Corporate Services as provisional liquidator, sources familiar with the matter said, asking not to be named as the matter is private. The board informed major shareholders and creditors of its decision, they said. The board declined to comment for this story.
The liquidation process spells an end to a start-up whose implosion and months-long battle for survival sent shock waves through South-east Asia and India’s tech industries. The once high-flying company pitched into a downward spiral after complaints of financial irregularities, culminating in the dismissal of high-profile co-founder and chief executive Ankiti Bose in May.
Ms Bose, 31, continued to deny any claims of wrongdoing throughout the crisis and argued she was being unfairly targeted.
As the clash between Ms Bose and the board escalated, she hired an attorney to fight back against what she described as a “witch hunt”.
Ms Bose argued that she was getting blamed for decisions and practices that were well known by senior managers and directors.
The liquidation comes after Zilingo creditors Varde Partners and Indies Capital Partners found a buyer for some of its assets, the sources said.

Those assets have been transferred to the new owner for an undisclosed purchase price, they said.
Zilingo had been one of the highest-profile start-ups to emerge from Singapore.
State investor Temasek expressed concern the meltdown was tainting its reputation and urged the company to fix the situation.
Other prominent investors included Sequoia Capital India, the regional arm of the Silicon Valley company that backed Apple and Google.
At the heart of the company’s breakdown was the soured relationship between Ms Bose, a celebrity CEO who criss-crossed the globe to speak at tech gatherings from Hong Kong to California, and her long-time supporter, Mr Shailendra Singh, head of Sequoia India.
Allies for years, they fell out as financial pressures mounted. Mr Singh lost faith in the management skills of the young founder he had championed, while Ms Bose believed Mr Singh betrayed her by pushing her out of her own company.
Zilingo was valued at close to US$1 billion (S$1.3 billion) in a 2019 funding round, when Ms Bose was 27. But the Covid-19 pandemic took a toll on its business, and the company was forced to cut jobs as revenue dwindled.
Chief financial officer Ramesh Bafna, a former chief financial officer of fashion e-commerce platform Myntra, left last May, a mere two months after joining the startup, and chief operating officer Aadi Vaidya departed soon afterwards.
In June, the board started weighing options, including liquidation and a management buyout, Bloomberg News reported at the time. That included a presentation from its financial adviser Deloitte LLP to sell off the company’s assets. Mr Dhruv Kapoor, who co-founded Zilingo with Ms Bose in 2015, made the pitch for a buyout.
Once operating in at least eight countries with hundreds of workers, Zilingo had most recently fewer than 100 staff in India, Indonesia, Sri Lanka and Bangladesh after a major downsizing amid the crisis. BLOOMBERG

 

[Singapore Dancing Spirit]

Temasek-backed Zilingo, which fired CEO Ankiti Bose, to be liquidated: Sources​

Zilingo, a once high-flying company, pitched into a downward spiral after complaints of financial irregularities. PHOTO: ZILINGO

Jan 20, 2023

SINGAPORE – Singapore’s Zilingo is set to enter liquidation, capping a months-long crisis that shocked Asia’s technology and start-up industries.
The fashion-tech company’s board appointed EY Corporate Services as provisional liquidator, sources familiar with the matter said, asking not to be named as the matter is private. The board informed major shareholders and creditors of its decision, they said. The board declined to comment for this story.
The liquidation process spells an end to a start-up whose implosion and months-long battle for survival sent shock waves through South-east Asia and India’s tech industries. The once high-flying company pitched into a downward spiral after complaints of financial irregularities, culminating in the dismissal of high-profile co-founder and chief executive Ankiti Bose in May.
Ms Bose, 31, continued to deny any claims of wrongdoing throughout the crisis and argued she was being unfairly targeted.
As the clash between Ms Bose and the board escalated, she hired an attorney to fight back against what she described as a “witch hunt”.
Ms Bose argued that she was getting blamed for decisions and practices that were well known by senior managers and directors.
The liquidation comes after Zilingo creditors Varde Partners and Indies Capital Partners found a buyer for some of its assets, the sources said.

Those assets have been transferred to the new owner for an undisclosed purchase price, they said.
Zilingo had been one of the highest-profile start-ups to emerge from Singapore.
State investor Temasek expressed concern the meltdown was tainting its reputation and urged the company to fix the situation.
Other prominent investors included Sequoia Capital India, the regional arm of the Silicon Valley company that backed Apple and Google.
At the heart of the company’s breakdown was the soured relationship between Ms Bose, a celebrity CEO who criss-crossed the globe to speak at tech gatherings from Hong Kong to California, and her long-time supporter, Mr Shailendra Singh, head of Sequoia India.
Allies for years, they fell out as financial pressures mounted. Mr Singh lost faith in the management skills of the young founder he had championed, while Ms Bose believed Mr Singh betrayed her by pushing her out of her own company.
Zilingo was valued at close to US$1 billion (S$1.3 billion) in a 2019 funding round, when Ms Bose was 27. But the Covid-19 pandemic took a toll on its business, and the company was forced to cut jobs as revenue dwindled.
Chief financial officer Ramesh Bafna, a former chief financial officer of fashion e-commerce platform Myntra, left last May, a mere two months after joining the startup, and chief operating officer Aadi Vaidya departed soon afterwards.
In June, the board started weighing options, including liquidation and a management buyout, Bloomberg News reported at the time. That included a presentation from its financial adviser Deloitte LLP to sell off the company’s assets. Mr Dhruv Kapoor, who co-founded Zilingo with Ms Bose in 2015, made the pitch for a buyout.
Once operating in at least eight countries with hundreds of workers, Zilingo had most recently fewer than 100 staff in India, Indonesia, Sri Lanka and Bangladesh after a major downsizing amid the crisis. BLOOMBERG

All Temasek initiatives eventually be liquidated as their master Lion is impotent, no strength and stamina.
They dealt with CECA and lost.

There won't be SGX or WallStreet.
but Singapore will have the new WORLD HQ for the WORLD's new Finance system which I am drafting a plan for.

Time to SUNSET the current world system

 

[LITTLEREDDOT]

FTX’s venture capital backers face ‘serious questions’, US official says​

Sam Bankman-Fried has been accused of stealing from FTX customers to pay debts incurred by Alameda Research. PHOTO: REUTERS

Jan 23, 2023

WASHINGTON – The failure of Sam Bankman-Fried’s FTX crypto empire raises “serious questions” about how well venture capitalists and money managers scrutinised his operations before investing client funds, a United States Commodity Futures Trading Commission (CFTC) official said.
“What kind of due diligence did they conduct?” commissioner Christy Goldsmith Romero said on Friday in a Bloomberg Television interview. “Why did they turn a blind eye to what should have been really flashing red lights?”
If a fund entrusts millions of dollars and then a year later has to write it off completely, it raises such questions, the regulator said.
She also pointed to comments by Mr John J. Ray III, who took over as FTX’s chief executive as part of its bankruptcy and has since described a lack of record-keeping and key controls when he was appointed.
It is worth considering, Ms Goldsmith Romero said, whether backers may have had potential conflicts of interest, given the interconnectedness of the crypto industry.
“Were there some conflicts that prevented them from really paying attention to the due diligence and the facts that they were uncovering?” she said.
US prosecutors meanwhile have seized nearly US$700 million (S$923 million) in assets from Bankman-Fried in January, largely in the form of Robinhood stock, according to a Friday court filing.

Bankman-Fried, who has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto hedge fund Alameda Research, has pleaded not guilty to fraud charges. He is scheduled to face trial in October.
The Department of Justice (DOJ) revealed the seizure of Robinhood shares earlier in January, but it provided a more complete list of seized assets on Friday, including cash held at various banks and assets deposited at crypto exchange Binance.
The ownership of the seized Robinhood shares, valued at about US$525 million, has been the subject of disputes between Bankman-Fried, FTX and bankrupt crypto lender BlockFi.
DOJ also said that assets in three Binance accounts associated with Bankman-Fried were subject to criminal forfeiture, but did not provide an estimate of the value in those accounts. BLOOMBERG, REUTERS

 

[batman1]

Why no dividends given to citizens of singapore ?