Deal with Shin saga openly and transparently

I REFER to the replies of Mr Laurence Lien and Ms Myrna Thomas ('Temasek accountable to Govt on portfolio basis' and 'Temasek operates like any investment firm'; ST, March 8) to Mr Patrick Tan ('Billions at stake, so Shin saga a national concern'; ST, March 3).

Mr Lien rightly explains that we should evaluate Temasek's performance on the basis of its portfolio returns as a whole. However, he fails to acknowledge that well-constructed investment portfolios are made up of prudent individual investment decisions. While an investment manager is ultimately concerned with his entire portfolio's performance, that in no way exonerates him from performing due diligence on each individual investment, nor does it excuse him from making each individual investment with reasonable care.

While I am not claiming that Temasek has been negligent, the Shin Corp saga nevertheless has valuable lessons to teach investors. Mr Lien should not divert attention from the issue of the individual investment by referring to Temasek's portfolio. Instead, due effort should be made to review what may have gone wrong in order to prevent such incidents from happening in the future.

Ms Thomas claims that Temasek acts like any other commercial investment firm. I disagree.

As Mr Lien points out, Temasek is accountable to the Government of Singapore, which is, in turn, accountable to Singapore as a nation. This introduces political overtones into every investment that Temasek makes. Whether Temasek likes it or not, it has to deal with the potential for its national ownership to spark political reactions in other countries.

Because Temasek is owned by the Government, the political risks that it faces when making investments are real, tangible and heightened in comparison to privately owned investment firms. Indeed, these risks should be magnified when one considers that even privately owned companies sometimes run into political reactions when making transnational acquisitions.

Let us not sidestep the issue but deal with it openly and transparently so that such incidents can be avoided in the future.

Kevin Lee Tianrong
Melbourne, Australia