GIC, Temasek provide loans in context of investment: Indranee

Govt does not direct these decisions and President's concurrence not needed, she says

MS INDRANEE RAJAH, Minister in the Prime Minister’s Office.

Singapore's GIC and Temasek provide loans to companies in the context of investment, and the Government does not direct these decisions, said Minister in the Prime Minister's Office Indranee Rajah in Parliament yesterday.

Like all other investments that the sovereign wealth fund and the investment company make, these are commercial decisions taken by professionals in the two entities, Ms Indranee added.

Workers' Party Non-Constituency MP Leon Perera had asked about the Government's role in loans provided by GIC and Temasek to companies battered by the coronavirus crisis.

He said: "When they provide rescue packages, be it through loans or through other instruments, to help to support the viability of some companies, but not others, that sometimes creates questions among some members of the public.

"Given that these are public funds, is there any way that the public can have some transparency about the thinking behind these probably quite significant decisions, which may continue to happen as this crisis winds its way forward?"

Earlier this year, Temasek had pledged to underwrite an effort by Singapore Airlines to raise $15 billion through the sale of shares and convertible bonds. The investment company owns 55 per cent of the airline group.

Singapore-based container ship operator Pacific International Lines is also in talks with a unit of Temasek on a potential investment aimed at keeping itself afloat.

Two Temasek-linked companies are creditors of the shipping line.

Replying, Ms Indranee said it was a wrong assumption that such loans are being provided to bail out companies.

She told the House that the role of GIC and Temasek is primarily to invest Singapore's reserves and to work within their investment policies to get the best returns possible.

They do so using a variety of instruments, including debt instruments such as bonds and loans, she said.

Ms Indranee, who is also Second Minister for Finance, made a distinction between such loans made in the investment context and loans provided by banks and finance companies, such as mortgage loans and working capital loans.

"(GIC and Temasek) don't do business the way banks do, or other kinds of entities in the context of rescuing," she said.

The Government does not direct GIC's and Temasek's individual investment decisions, including decisions on whether or when to invest in a loan, she noted.

Ms Indranee added that the President's concurrence is also not needed for these decisions.

"Instead, the Government holds the boards of GIC and Temasek accountable for the overall performance. The Government ensures that GIC and Temasek have competent boards and such appointments are subject to the President's concurrence," she said.

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A version of this article appeared in the print edition of The Straits Times on June 06, 2020, with the headline GIC, Temasek provide loans in context of investment: Indranee. Subscribe