Temasek Goodyear split surprises Singapore finance community
Updated
Singapore's sovereign wealth fund and CEO-heir apparent Charles "Chip" Goodyear have parted ways. The company and the high-profile former resources executive say the decision was based on strategy differences. But analyst say it's likely clashes in management style caused the split.
Presenter: Stephanie March
Speakers: David Cohen, Action Economics analyst; Associate Professor Melvyn Teo Singapore Management University
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MARCH: Singapore is not as familiar with political and corporate scandals as some of it's regional neighbours. The announcement that Temasek Holdings and CEO-designate Chip Goodyear were parting ways however tongues wagging in the country's financial sector. David Cohen is from Action Economics in Singapore.
COHEN: It surprised everyone it had been well on it's way for Mr Goodyear to assume the position at Temasek.
MARCH: Mr Goodyear was appointed to Tamesek's board in February this year, after a lengthy search for a successor to incumbent C-E-O Ho Ching. Mr Goodyear's background in mining and resources, led analysts to assume the plan was for him to lead Temasek away from it's traditional background of banking, transport and infrastructure investments, toward more risky commodities and energy portfolios. Not only would he be replacing the wife of Singapore's Prime Minister in the role, he would have been the first foreigner to take the reins of the 88-billion-US-dollar dollar state-owned investment fund.
COHEN: In a sense it seems a bit silly that from both their points of view it would have been better to follow through, it's a little embarrassing for Temasek to make this announcement, and presumably for Mr Goodyear managing jobs, managing 100-billion dollar funds don't come along everyday.
MARCH: The company and Mr Goodyear have released a joint statement saying "differences regarding certain strategic issues that could not be resolved" led both parties to mutually decide to terminate the leadership transition process. Melvyn Teo, associate finance professor at Singapore Management University, says this probably not the real reason for the split. He says Temasek knew what it was buying into when it brought in Mr Goodyear. TEO: Maybe it didn't fit his style of management. Temasek is after all a sovereign wealth fund in fairly conservative country and Chip Goodyear has worked all his life in Western countries like BHP Billiton, so maybe it's not easy for him to adjust to the management style at Temasek.
MARCH: Professor Teo says the company's big losses on holdings in Western banks bought during the early phase of the credit crisis could have caused additional problems for Mr Goodyear.
TEO: They are still reeling from some of their recent mistakes; mistakes in Shin Corp, Merrill Lynch and Barclay's, so perhaps the board is trying to cut down on risk and this is probably making it much harder for Chip Goodyear to be as dynamic and opportunistic as he would like.
MARCH: The company put considerable time and effort into selecting and courting Mr Goodyear for the position. Professor Teo says Singaporians are going to want more details on why the deal went sour.
TEO: After all people believe Temasek is investing state money, so they would like have a say or know about what is going on, so they are going to have to clarify.
MARCH: Dr Teo says the search for a new CEO will take at least a year. Until then Ho Ching is expected to remain in the position.
TEO: I think it's important for Temasek to find the right person, and to ensure the next person that gets into this hot seat stays on for at least 5 years.
MARCH: Some analysts have said it will be difficult for Temasek to attract a foreigner to the position in the future, but others point out it's not every day the opportunity to manage an 88-billion-US-dollar investment fund, arises.
