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Sovereign wealth fund pulls back

by Tillmann Elliesen

Temasek Holdings, the heavyweight investment company controlled by Singapore’s government, will not acquire any more controlling stakes in companies outside the country. According to The Economist,
S. Dhanabalan, the company’s chairman, made that declaration. He similarly told The Straits Times that, because of rising nationalism in many countries, Temasek would observe “three golden rules” in its international activities: it would
– seek no majority holdings,
– work through local partners and
– consider the “emotional sentiments” Temasek acquisitions might arouse.

Temasek is facing a complaint by Indonesia’s antitrust agency. The sovereign wealth fund is involved in two Indonesian telecoms firms. Antitrust officers accuse Temasek of monopolising the Indonesian market. The company rejects the charge and claims that its investments were indirect, made through two Singaporean companies, and amounting only to minority holdings in each case. Moreover, it argues, the acquisitions were approved by the Indonesian government in 2001 and 2002. Temasek manages a global portfolio of more than $ 100 billion and mainly focuses on Asia. (See also E+Z/D+C 12/2007, p. 452.) (ell)