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Temasek should flag suspicions in accounts of portfolio firms
SINGAPORE investment company Temasek Holdings can be expected to query portfolio companies during shareholders' meetings when it spots something suspicious in audited accounts, said Senior Minister of State for Finance and Law Indranee Rajah in Parliament on Tuesday.
"Does the Ministry of Finance expect Temasek, when it sees something suspicious in audited accounts, to raise it at shareholders' meetings? The answer is 'yes'," she said in response to queries from Member of Parliament Sylvia Lim (Aljunied GRC).
Ms Lim had asked if Temasek queries suspicious practices in the companies that it invests in. Her question comes in the wake of Keppel Corporation's offshore and marine bribery scandal. Keppel made headlines in late December over the news that its offshore and marine unit was slapped with US$422.2 million in fines after a former agent paid out bribes to secure contracts in Brazil.
The government also expects Temasek to uphold the highest standard of integrity and corporate governance, said Ms Indranee. This standard is, in turn, expected from Temasek's investee companies. The government is the sole shareholder of Temasek.
Ms Indranee made references to an address that Temasek chairman Lim Boon Heng made to Temasek-linked companies; the speech was made public on Monday.
In addressing the chairs of major Temasek-linked firms at a session after Temasek's Chinese New Year lunch on Feb 27, he said: "In markets where practices are questionable and compromising integrity is required to win business or contracts, we have to be very clear - there is a bright red line our companies should not cross."
The transcript released by Temasek also showed that the state investor is having a roundtable on governance and ethics, and major companies in its portfolio have been urged to actively take part.
"What happened recently was a shock, not just to the company concerned," said Mr Lim.
He added that "it really dents the reputation of Singapore and all the other Temasek companies", and told his audience that it is important to safeguard the reputation of "your company and our nation".
As part of the roundtable and follow-up events, Mr Lim said Temasek will bring in experts and companies that have dealt with corruption and bribery, to share how best practices were implemented.
There will also be a series of forums on topics such as managing reputational challenges.
"I count on your support as we build and deepen engagement on these questions with you and your teams in coming months," Mr Lim told the Temasek-linked companies.