Wednesday, July 22, 2009

The Temasek Conundrum

There is a Chinese saying: Human sympathy is as thin as the paper; world affairs are like playing chess where each game is new. The sudden departure of Mr. Charles Goodyear as CEO-designate may sound like a bombshell but is not actually unexpected. The antics of Temasek Holdings have ceased to intrigue right-thinking Singaporeans.

But Singaporeans will certainly be more interested to know more than just the terse reason of "unresolved strategic differences" given for the dramatic flip-flop. But we must accept that it is not uncommon for government-linked companies to hide behind stereotyped statements for any administrative or financial lapses.

There was considerable fanfare when it was announced by Temasek Holdings early this year the appointment of Mr. Charles Goodyear as the CEO-designate to take over fully from Ms Ho Ching on lst October. It has found this gem of a prospective CEO after continual search and approached him as early as 2007. It seems that Temasek had spent more than a year wooing Mr. Goodyear, who was interviewed by board members individually and as a group. If Temasek had gone through such elaborate and meticulous efforts to recruit this eminent personality, there was no reason to believe that it could not have foreseen any flaw in its recruitment plan which now has to be aborted. Having interviewed the candidate so thoroughly, it is quite unbelievable that is could not have detected any sign of intransigency in his character, which appears to be the root of the present fiasco.

Now there is the question of compensation as a farewell gift to the gracious Mr. Goodyear for his noble acquiescence to leave, thus saving Temasek from an intractable situation if he chooses to remain in his career. The compensation can run into millions of dollars but then this will be only a drop in the ocean in Temasek's coffers. It is known to have lost billions of dollars in the sales of its stakes in Bank of America and the British Barclays Bank without any compunction. The Chinese press reported that Mr. Goodyear decided to leave on his own accord in which case the question of compensation is a moot point.

Singaporeans were quite elated on learning the news early this year that Ms Ho Ching was relinquishing her CEO post in Temasek to make way for Mr. Goodyear. Now will the news that she is going to helm Temasek indefinitely following the leadership transition fiasco have a welcoming or dampening effect on Singaporeans is going to be a million-dollar question. This will depend on whether she is astute enough not to merrily squander away Temasek's assets. Her track record in this respect has been disastrously unimpressive, losing billions of dollars of public money with impunity.

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