Temasek Holdings Founding Terms of Reference, Charter Revision Approval Process and Reasons for Discontinuation of Industry Cluster Nurturing Role
Ministry of FinanceSpeakers
Summary
This question concerns Temasek Holdings' founding terms of reference, the approval process for Charter revisions, and the removal of its role in nurturing new industry clusters. Mr Kenneth Tiong Boon Kiat asked the Prime Minister and Minister for Finance if 1974 terms of reference exist for publication, how Charter revisions are approved, and why the cluster-nurturing role was removed in 2009. In response, Mr Jeffrey Siow stated that no terms of reference were issued at incorporation, affirming that Temasek was always intended to operate independently and commercially. He explained that Charter revisions are reviewed periodically in consultation with the Government, and specific references to new clusters were removed because they described portfolio management practices rather than its fundamental mandate. Consequently, this removal did not change Temasek's mandate, as it continues to invest commercially in new opportunities locally and globally to generate sustainable long-term returns.
Transcript
4 Mr Kenneth Tiong Boon Kiat asked the Prime Minister and Minister for Finance (a) whether Temasek Holdings was issued terms of reference on incorporation in 1974, and whether they will be (i) published and (ii) deposited with the National Archives; (b) how the Government as sole shareholder approves Charter revisions; and (c) when and by whose decision the 2002 Charter's role of nurturing new industry clusters in Singapore ended, and why it was removed in 2009.
Mr Jeffrey Siow: The history and purpose of Temasek is well documented. There were no terms of reference issued to Temasek when it was first incorporated. But it has been clear since its early years that Temasek would operate independently and be commercially driven.
The Temasek Charter was introduced in 2002 to articulate Temasek's role and approach as an investment company. It is a living document which Temasek reviews periodically, in consultation with the Government as its shareholder.
The 2002 Charter referred, among other things, to Temasek investing in new businesses and new industry clusters, as well as divesting businesses which were no longer relevant and lacked international growth potential. These references described aspects of how Temasek invested and managed its portfolio; they were not in themselves fundamental to Temasek's mandate.
In subsequent updates to the Charter, these specific references were therefore no longer considered necessary as part of the Charter. Their removal did not signify a change in Temasek's mandate, nor a decision to stop investing in new businesses or promising sectors in Singapore. Temasek continues to invest and recycle capital into new opportunities, in Singapore and globally, where these are commercially attractive and consistent with its mandate to deliver sustainable returns over the long term.