SINGAPORE 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
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 TEM.UL 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 (C.N) and Merrill
Lynch MER.N, 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
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 (STEG.SI), 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
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.
(Reporting by Saeed Azhar, editing by Neil Chatterjee & Jan