Government keeping hands off Temasek investment decisions, Shanmugam says

Political pressure could compromise commercial discipline, the senior minister added. 

The government will continue to leave individual investment decisions to Temasek and its portfolio companies, including Singapore Airlines (SIA), as debate grows over the carrier’s exposure to Air India.

In a media doorstop on 5 September, Senior Minister K Shanmugam said government or political interference in individual investments could compromise commercial discipline.

“Decisions will become politicised — shaped by political considerations, rather than commercial judgment,” Shanmugam said. “In the end, Singaporeans will bear the cost.”

His comments came after reports that Air India is seeking fresh equity from its shareholders, including SIA.

Shanmugam said the airline, rather than Temasek, is the shareholder in Air India, and that any decision to provide further funding lies with the airline.

“It is the responsibility of SIA to assess its investments in Air India in relation to the resources it has for the long-term growth and profitability of the company,” he noted.

SIA has more than $10b in cash reserves and over $3b in undrawn credit facilities.

Shanmugam added that Temasek is accountable to the government for the performance of its overall portfolio, but not for individual investments or decisions made by its portfolio companies.

He pointed out political pressure could also make boards and management more cautious about taking investment risks, which could weigh on returns over the medium to long term.

Meanwhile, SIA shareholders and the public can expect the airline to conduct a rigorous assessment before committing further capital and to remain accountable for its decisions.

“We should leave it to SIA to decide what it does with its investments,” he said. “Of course, SIA shareholders, as well as the broader public, have a right to expect that SIA will be accountable and transparent.”