Standard Chartered Says Temasek Vote Not a Criticism of Strategy

Standard Chartered Says Temasek Abstention Isn’t a Criticism
A Temasek Holdings Pte employee walks past the company's signage in their office in Singapore. Photographer: Munshi Ahmed/Bloomberg

Standard Chartered Plc said Temasek Holdings Pte wasn’t being critical of the bank’s strategy and leadership when it declined to back the election of non-executive directors in May.

The Singapore investment company, Standard Chartered’s biggest shareholder, raised concern over the London-based lender’s governance plan and is pushing it to hire more independent directors, said a person with knowledge of the situation who asked not to be identified because the matter is private. Jeffrey Fang, a Singapore-based spokesman for Temasek, declined to comment.

“Temasek have assured us that their abstention does not imply any criticism of the individuals concerned, nor Standard Chartered’s performance or strategy,” Doris Fan, a Hong Kong-based spokeswoman at Standard Chartered, said in an e-mail today. “Temasek has voted in favor of all other resolutions” at the annual general meeting.

Standard Chartered, Britain’s second-biggest bank by market value, appointed four non-executive directors as part of a plan started a year ago “to enhance the experience, depth and diversity” of the board, it said last week. Temasek has talked to potential buyers of its 18 percent stake in recent months, the Financial Times reported on Sept. 25, citing people close to the matter. There were no discussions under way at the time, according to the report.

Management Oversight

In order to ensure effective management oversight, Temasek advocates that the boards of companies in which it invests are independent from management, the investment company said in its latest annual review, published in July. “We do not support excessive numbers of executive members on company boards,” Temasek said, without elaborating.

The dialogue with Temasek “does seem to mitigate against there being any precipitous plan to offload some or all of its shares near-term,” said Ian Gordon, a London-based analyst at Investec Plc who recommends buying the stock with a 1,800 pence price target.

Temasek’s withholding of the vote at the annual shareholder meeting relates to a misinterpretation of U.K. corporate governance standards, Standard Chartered’s Fan said.

Standard Chartered appointed Lars Thunell, Margaret Ewing, Om Prakash Bhatt and Louis Chi-Yan Cheung as non-executives, it said in a statement on Sept. 28. Thunell and Ewing start on Nov. 1, while Bhatt and Cheung start Jan. 1. The lender’s board currently includes six executives and 10 independent non-executives, as well as a chairman and company secretary, according to its website.

The bank rose 0.2 percent to 1,407 pence at 12:00 noon local time, valuing it at 33.7 billion pounds ($54.3 billion).

The Wall Street Journal reported the pressure on Standard Chartered to appoint more independent directors earlier today.

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