Investigating the scale of state-owned business in Singapore

On Saturday, the UK's Guardian newspaper published an opinion piece under the headline Singapore-on-Thames? This is no vision for post-Brexit Britain.

Written by a former Singapore correspondent at the Financial Times, Jeevan Vasagar, the article uses a selection of little-known facts about the city state to help dilute the idea that Singapore is a small-state, low-regulation, low-tax jurisdiction that could provide a suitable model for a post-Brexit Britain; like many things, it's not as simple as that.

Bureau van Dijk doesn't have any political opinions, but what caught my eye was Vasagar's passing reference to Temasek, a state-owned investment fund that's a "majority shareholder of big companies like Singapore Airlines and the telecoms operator Singtel".

As we'll see, these subsidiaries represent but tiny segments of the complete picture, albeit big chunks of Temasek's combined revenue.

I used Ownership Explorer, a visualisation tool within Orbis, our global database of more than 275 million private companies, to investigate.

Given the tens of thousands of nodes involved in the computation, drawing all Temasek's subsidiaries to the surface would take a while to run. But Orbis can quickly generate all the subsidiaries that Temasek controls, defined by ownership of at least 50.01% at every level in the structure.

The results of this query are still staggering, and best illustrated by the series of increasingly panned-out screenshots below.

These images take Temasek Holdings as the starting point and show all the subsidiaries that it owns or partially owns, both directly and indirectly, with percentage shares and lines of ownership indicated, assuming no ownership link drops below 50.01%.

By the time we reach the final panorama, Temasek is a barely visible dot.

Zoomed-in

Panned-out

Panned-out again

And again

And again

Full view

So, what does this say about the scale of state-owned business in Singapore?

According to Temasek's group income statement, revenue for 2016 was S$101.5 billion. Converted to US dollars, that's $75.1 billion – or more than 18% of Singapore's GDP that year of $410.3 billion.

Of course, many of the companies that Temasek owns are overseas – see the screenshot below, which shows a section of the corporate group after using Orbis's display options to colour Singapore-registered companies in purple.

So equating $75.1 billion with the amount of business generated by Singaporean companies controlled by Temasek is a stretch, even when factoring in non-controlled companies in which it has small stakes. Further analysis on Orbis, using its detailed financials, which can be downloaded for predefined datasets such as these Temasek subsidiaries, would show this.

But the true number will still be massive. And it's clear that Temasek's tentacles spread far and wide, with the city state having more control and commercial influence (beyond policy-making) than some commentators and politicians would perhaps acknowledge.

New white paper

We touch on the issue of controlling ownership in our latest white paper. Published last week, The definite guide to beneficial ownership is ideal for those who are new to the topic, or looking for a refresher course. It covers everything from what beneficial ownership is to the technology available to keep up with constant ownership change.

Download the guide.