PARLIAMENT: Debate on ministries’ budgets

MOF expects Temasek to query portfolio firms

Firm ought to do so at shareholder meetings if it spots irregularities in accounts: Indranee

Investment firm Temasek Holdings can be expected to query portfolio companies at shareholder meetings if it spots irregularities in the accounts, said Senior Minister of State for Finance and Law Indranee Rajah yesterday.

She told Parliament: "Does the Ministry of Finance (MOF) expect Temasek, when it sees something suspicious in audited accounts, to raise it at shareholders' meetings? The answer is yes."

The comments were in response to queries from Ms Sylvia Lim (Aljunied GRC), who had asked if Temasek queries suspicious practices in the companies that it invests in.

Her question comes as Keppel Corporation's offshore and marine unit was fined US$422.2 million (S$557 million) last December over bribes paid by a former agent to secure contracts in Brazil.

Ms Indranee added that the Government also expects Temasek to uphold the highest standard of integrity and corporate governance - a standard that, in turn, is expected from Temasek's investee companies. The Government is the sole shareholder of Temasek.

Ms Indranee also outlined three areas where Temasek plays the role of an advocate for good corporate practices.

One is by fostering an ethos of integrity, good governance and sustainability.

Ms Indranee referred to remarks made by Temasek chairman Lim Boon Heng when he was addressing the chairmen of Temasek-linked companies on Feb 27.

Mr Lim told them: "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."

Temasek also monitors the strategy and performance of its portfolio companies, Ms Indranee said, adding that it conducts regular roundtables on topics of interest to these companies as well.

She also noted that the Government aims to reduce its rate of late payment to business vendors to below 5 per cent on average, down from 6.5 per cent now. She added that the Government processes an average of two million payments to more than 23,000 companies a year.

Since the start of this year, all businesses that transact with the Government have needed to submit payment details only once.

The Accounting and Corporate Regulatory Authority of Singapore is simplifying the filing of annual returns for exempt private companies and certain dormant companies as well. This will potentially benefit 150,000 companies, said Ms Indranee.

A version of this article appeared in the print edition of The Straits Times on March 07, 2018, with the headline 'MOF expects Temasek to query portfolio firms'. Print Edition | Subscribe