Quoteworthy: "I have met many CEOs of multinational enterprises in recent months. They are all keen to grow their presence here. Because in this troubled world, they see Singapore as a stable, reliable and trusted partner." –— Prime Minister Lawrence Wong in his maiden National Day Rally speech on Aug 18
Temasek mulling exit from Schneider Electric India venture
Temasek Holdings is weighing a potential exit from an Indian joint venture with Schneider Electric, people with knowledge of the matter said.
The Singapore-headquartered investment firm has been discussing options, including a sale of its minority stake in the joint venture to Schneider or another party, the report said. An initial public offering is another option that Temasek has considered.
Schneider said in 2020 it had completed a deal to merge its Indian low voltage and industrial automation product unit with Larsen & Toubro’s electrical and automation operations. The combined business, known as Schneider Electric India, is 65% owned by the French company, with the remainder held by Temasek, according to a statement at the time.
Deliberations are at an early stage and it is unclear what form a transaction may ultimately take, the people said. Representatives for Temasek and Schneider declined to comment. — Bloomberg
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KKR, Hulic bid $2.7 bil for GIC’s central Tokyo skyscraper
A group led by KKR & Co and one of Japan’s largest real estate companies made a bid to acquire a Tokyo skyscraper owned by Singapore sovereign wealth fund GIC, according to people familiar with the matter.
KJR Management, a Japanese real estate unit of KKR, and Hulic Co put in the offer for Shiodome City Center, a 43-storey office tower in one of Tokyo’s central business districts. The bid was priced around JPY300 billion ($2.7 billion), they added, making any potential sale one of the most expensive office building transactions ever in Japan.
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GIC appointed brokers and started marketing Shiodome City Center to potential buyers in mid-2023 with hopes of clinching a deal early this year, Bloomberg reported last September. But the sale dragged on as an anchor tenant was replaced and, at one point, was taken off the market, one of the people said.
The KKR-Hulic offer was the sole bid for the building, one of the people said. Discussions are ongoing and the parties involved may decide against proceeding with a deal, according to the people. More capital partners could also join the KKR and Hulic bid, another person added.
Unlike in the US, the commercial real estate market has been stable in Japan as the weak yen and low borrowing costs continue to draw investor interest. Tokyo’s office market has also fared better than other major cities around the world since the pandemic because work-from-home habits have not stuck in Japan. Vacancy rates in the capital’s business areas have averaged around 5.5% this year.
Tokyo’s top-grade office towers rarely change hands as local developers tend to hold on to the properties they build. A GIC affiliate developed Shiodome City Center in 2003 with Mitsui Fudosan, one of Japan’s largest real estate companies. — Bloomberg
Binance hiring 1,000 as compliance spend tops US$200 mil
Binance is hiring 1,000 people this year, with many earmarked for compliance roles as the crypto exchange’s annual spending to meet regulatory requirements, including US oversight under a plea deal, tops US$200 million ($261.3 million).
CEO Richard Teng, who is visiting the US to talk to monitors and officials, outlined the employment goals for the world’s largest crypto trading platform in an interview with Bloomberg News in New York on Aug 21.
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“I’ve been a regulator all my life,” Teng said. “Government agencies are important.” He declined to say whether he had met with the Securities and Exchange Commission (SEC) during his trip. The SEC is suing Binance and was not part of the US settlement.
That plea deal with the Justice Department and other US agencies included a US$4.3 billion penalty for failures that let criminals and terror groups use the exchange. The firm faces years of compliance monitoring by the DOJ and the US Treasury’s Financial Crimes Enforcement Network.
Binance plans to have a 700-strong compliance workforce by the end of the year, up from about 500 currently, said 55-year-old Teng. His career includes stints as a senior regulator at the Monetary Authority of Singapore as well as at the Singapore Exchange S68 . He was also CEO of the regulator at Abu Dhabi’s international financial centre.
Teng said Binance fields a growing number of requests from law enforcement agencies worldwide, numbering 63,000 so far this year, up from 58,000 in 2023.
Spending on compliance has climbed from US$158 million two years ago and is set to increase further, he said. The monitors appointed by the US agencies, Forensic Risk Alliance and Sullivan & Cromwell, have already begun work.
“They’re going to do an assessment,” Teng said. “We’re very early in the journey.” The monitors keep an eye on the company’s financial statements and transaction tracking, he added.
In June, a judge ruled that the bulk of the SEC lawsuit against Binance and its billionaire co-founder Changpeng “CZ” Zhao can proceed. The SEC sued Binance and Zhao in 2023 for mishandling customer funds, misleading investors and regulators, and breaking securities rules. The defendants contested the claims and asked for the case to be dismissed. Teng said Binance will continue to fight the accusations.
Teng took over as Binance’s CEO after Zhao stepped down as part of the US plea deal. Zhao was subsequently sentenced to a four-month jail term. Teng said the business continues to be profitable and that Dubai, Abu Dhabi and another city he declined to specify are on a short-list of potential locations for the headquarters. A company spokesperson two months ago said Binance’s headcount was upwards of 5,000 staff. — Bloomberg
A $26.4 bil plan to export power to Singapore gets nod
The first stage of one of the world’s most ambitious renewable power projects won environmental approval, paving the way for the billionaire-funded plan to export solar electricity from Australia to Singapore.
The Australian government on Aug 21 cleared the first phase of the A$30 billion ($26.4 billion) AAPowerLink project. Its developer, Sun Cable, was bought by billionaire Mike Cannon-Brookes in May last year.
The link involves a 4,300km subsea power cable connecting a solar farm in Australia’s Northern Territory with more than 20 gigawatts of capacity to Singapore. The cable and the solar farm would be more than four times bigger than any others currently operating internationally.
“This massive project is a generation-defining piece of infrastructure,” Environment Minister Tanya Plibersek said in a statement. “It will be the largest solar precinct in the world — and heralds Australia as the world leader in green energy.”
The first phase consists of 4 gigawatts of solar panels, as well as an 800km overhead cable to Darwin.
Sun Cable will focus on advancing AAPowerLink to a final investment decision in 2027 and seeks to begin exporting electricity in the early 2030s, it said. It still needs approvals from indigenous groups in Australia, as well as from Singapore and Indonesia. — Bloomberg
Hong Kong crypto exchanges face challenges getting full licences
Hong Kong’s push for a digital asset hub faces growing pains amid uncertainty over whether 11 crypto exchanges will all achieve full licences after earlier receiving initial approvals.
The city’s Securities and Futures Commission found unsatisfactory practices at some of the “deemed-to-be-licensed” platforms during on-site inspections carried out since they won the designation in June, people familiar with the situation said, asking not to be identified because the information is private.
Some of the crypto firms are overly reliant on a handful of executives to oversee the custody of client assets, while others are not properly guarding against cybercrime risks, the people said.
The 11 deemed-to-be-licensed exchanges include global players such as Crypto.com and Bullish, as well as HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, WhaleFin and Matrixport HK.
For platforms that are unable to remedy “critical deficiencies identified during on-site inspections, the SFC may opt to remove their deemed-to-be-licensed status or refuse their licence applications,” the spokesperson added.
Licensing crypto exchanges is a cornerstone in Hong Kong’s web3 agenda that was first proposed in 2022 — part of a bid to restore the city’s appeal as an international financial hub following a political crackdown. However, authorities have taken a relatively cautious approach that has so far struggled to generate much traction in terms of personnel shifts or capital inflows.
A major scandal involving JPEX, an unlicensed crypto platform, has spurred officials to prioritise investor protection. The alleged scam stung 2,636 victims with a total of HK$1.6 billion ($270 million) in losses, according to the police. The investigation for prosecutions is ongoing, a police spokesperson said.
The exchanges under scrutiny have been forbidden from onboarding new clients until they are granted full licences. If turned away, applicants would need to restart the submission process from scratch. Full licences are expected to be issued around the end of this year for firms that satisfy all requirements.
Only two crypto platforms — OSL and HashKey — are fully licensed in Hong Kong at present. Those operating before Hong Kong installed its regime were allowed to remain open for business while applying for a licence. Non-applicants had to exit the market by the end of May.
The licensing process has already seen 12 companies withdraw their applications, including Huobi HK, OKX, Bybit and VAEX. — Bloomberg
