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Temasek
tells U.S. its goals are commercial
Saeed
Azhar
Reuters
6 Mar
08
http://www.reuters.com/article/mergersNews/idUSSIN33955320080306
Singapore
state investor Temasek, trying to soothe Western concerns over
investments by Asian and Middle Eastern government funds, has
told the United States its intentions are commercial and aimed at
maximizing long-term returns.
Trumpeting close military
and commercial ties between Singapore and the United States, a
senior Temasek Holdings executive told a U.S. House of
Representatives subcommittee that it supports the aim of U.S.
lawmakers to maintain the right balance between national security
and investment flows.
"As Temasek grows and
increasingly diversifies its global portfolio, it is mindful that
its success has been rooted in the commercial principles and
strong governance which has served it well," said Temasek's
Executive Director Simon Israel in his testimony late on
Wednesday. A transcript of his remarks was released on Temasek's
Web site on Thursday.
"Temasek fully appreciates and
supports the Congress's goal to maintain the right balance in
protecting national security in ways that continue the
traditional welcoming attitude of the United States toward
foreign investment."
The testimony came amid growing
concerns in the West that foreign governments might be investing
for political rather than financial gain, and might someday use
those stakes to advance their own national interest.
Sovereign
wealth funds such as Temasek and the Government of Singapore
Investment Corp (GIC) have invested in some of America's biggest
banks, including Citigroup and Merrill Lynch, who sought billions
of dollars after suffering huge losses tied to risky subprime
mortgages.
These funds, many of which are in emerging
market countries in the Middle East as well as Russia and China,
have been bolstered by rampant oil prices and large U.S. trade
deficits. These factors have accelerated the accumulation of
assets abroad that are being reinvested back into the United
States.
Israel said nearly 80 percent of Temasek's $110
billion global portfolio comprises investments in Singapore and
Asia.
"Developed markets such as the United States
and Europe are a long-standing and growing part of our
portfolio," he said.
He said Temasek's $4.4 billion
investment in Merrill in December was only the latest financial
linkage with Singapore, a "trusted friend" of the U.S.,
its 15th-largest trading partner and "active in operations
to reconstruct Iraq and Afghanistan."
Other Temasek
investments include startup companies in Silicon Valley and
ownership of Virginia-based defense technologies supplier VT
Systems through its 50-percent ownership of ST Engineering, he
said, adding it does not get involved in the day-to-day
operations of such firms.
Israel, a New Zealander, said
Temasek does not discuss its investments with the Singapore
government, and also highlighted that 40 percent of its senior
management team are non-Singaporeans.
Temasek is headed by
Ho Ching, the wife of Singapore's prime minister Lee Hsien Loong,
and its sole shareholder is the Ministry of Finance. Singapore's
bigger and more secretive wealth fund GIC is headed by the prime
minister's father, Singapore's founding prime minister Lee Kuan
Yew.
Singapore's wealth funds are also taking part in
global talks to draft rules to oversee the behavior of state
funds without discouraging them from investing in the United
States at a time of global financial turmoil.
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