Temasek Holdings Ltd. chairman S. Dhanabalan said the firm had just completed a five-year plan which would include divestment and reduction of its stake in marginal operations.

But it will maintain its interests in important companies like Singapore Airlines Ltd., ports and telecommunications, said Dhanabalan, who dismissed fears of a political agenda behind such stakes.

While certain companies have "attained maturity" to be able to compete in the global arena, "the developmental role played by Temasek is still crucial," Dhanabalan told the foreign correspondents association.

Commenting on criticism that perceived government influence on firms through Temasek has affected their attempts to expand beyond the small domestic market, Dhahabalan said Temasek was trying to deal with it.

Singapore Telecommunications Ltd. (SingTel) has failed to acquire stakes in Hong Kong and Malaysia largely due to concerns over the degree of influence by the Singapore government, according to analysts.

SingTel successfully acquired Cable and Wireless Optus Ltd. of Australia this year, but not after going through a wringer over fears in Australia that its national security could be compromised if a foreign firm controlled a crucial telecoms carrier.

"This is something we are conscious of and we have to manage that," Dhanabalan said.

"As we go forward and as it becomes more and more clear that our companies are being driven basically by commercial considerations and that they do not have any political and national agenda to pursue on behalf of the government, I think people will become more comfortable.

"But it is something that we need to be aware of and to manage carefully," he said.

Dhanabalan, also chairman of Southeast Asia's biggest lender DBS Bank, maintained the government must remain in key sectors of the economy.

"We feel that we should have control or influence over projects with strategic importance," he said, citing Temasek's primary objective in the next five years.

A second priority would be to "participate in high-risk growth sectors" like biomedical sciences which Singapore is developing to reduce the city-state's dependence on electronics exports.

The third area would be to "nurture" Singapore companies, whether part of or outside its stable, to become regional and global players, Dhanabalan said.

He said there was a need to keep interests in strategic sectors, although not necessarily controlling stakes, because Temasek wanted to "continue to have some insight into the industry and into the company."

"Outside these, we will continue to reduce our participation (in marginal operations) through our divestment policies basically because we want to focus our scarce management resources," he said.

Temasek covers the cream of Singapore's corporate sector, such as DBS Bank, Singapore Airlines, shipping giant Neptune Orient Lines and SingTel, Singapore Power and Singapore Technologies.

Its listed entities account for about 24 percent of the capitalisation of the Singapore stock market. Government-linked firms in general account for about 13 percent of gross domestic product.

Temasek has completely divested its shareholding in 40 companies since 1985 and has also partly sold off its interest in 25 companies, he said.

Calls by some sectors for Temasek to get out of the private sector were due to the experience of state-owned enterprises in other countries marked by losses, corruption and nepotism, he said.

"None of these reasons apply to Singapore. Arguments advanced are therefore not economic but ideological," Dhanabalan said.

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