Temasek to hold talks on governance with portfolio firms

Investment firm Temasek Holdings will hold talks with bosses at its major portfolio companies on how to improve governance, in the wake of the bribery scandal that engulfed a Keppel Corporation unit.

Temasek chairman Lim Boon Heng noted in remarks released yesterday that Singapore has been consistently rated one of the world's least corrupt countries.

But he stressed that there is a continuing responsibility to uphold this reputation. "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."

Mr Lim was addressing the chairmen of major Temasek-linked companies at a session after Temasek's Chinese New Year lunch on Feb 27.

A Temasek team will bring in domain experts and companies that have dealt with corruption and bribery to share how best practices were implemented, he said. There will also be a series of forums on topics such as managing reputational challenges.

Mr Lim said he hoped Temasek would be able to "proactively engage" with the companies' boards and leadership teams in the coming months on issues such as regulatory challenges and how to tackle them.

When wrongdoing takes place, "we all must be ready to engage shareholders and stakeholders, with what we have done to remedy the wrongdoing, and ensure it does not recur", he noted.

"What happened recently was a shock, not just to the company concerned, but it really dents the reputation of Singapore and all the other Temasek companies," he added.

While Mr Lim did not specifically cite any company, Keppel made headlines in late December when its offshore and marine unit was fined US$422.2 million (S$557 million) after a former agent paid bribes to secure contracts in Brazil.

Mr Lim said corruption offences are not limited to bribes, and can take the form of price-fixing and collusion, among other guises.

He told the companies at the Temasek lunch: "It takes courage to walk away from business opportunities, but it is more important to maintain and protect the reputation of your company and our nation.

"You all know that corporations can be held legally accountable for the actions of their staff and their third-party agents."

A version of this article appeared in the print edition of The Straits Times on March 06, 2018, with the headline 'Temasek to hold talks on governance with portfolio firms'. Print Edition | Subscribe