GIC, Temasek grant loans as part of the investment: Indranee

Singapore’s GIC and Temasek provide business loans for investments, and the government does not direct those decisions, Prime Minister’s Office Minister Indranee Rajah told parliament yesterday.

Like all other investments the sovereign wealth fund and investment company make, these are business decisions made by professionals from both entities, Ms Indranee added.

Out-of-Constituency Workers’ Party MP Leon Perera had asked about the government’s role in the loans given by GIC and Temasek to businesses affected by the coronavirus crisis.

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

“Given that these are public funds, is there a way for the public to have some transparency about the thinking behind these probably quite important decisions, which may continue to happen as this crisis progress?”

Earlier this year, Temasek 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% of the airline group.

Singapore-based container ship operator Pacific International Lines is also in talks with a Temasek unit over a potential investment to keep it afloat.

Two companies linked to Temasek are creditors of the shipping company.

In response, Ms Indranee said it was a wrong assumption that such loans were given to bail out businesses.

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

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

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