By Gabriel Chen & Fiona Chan

THE Ministry of Finance (MOF) said yesterday it was 'unfortunate' that Temasek Holdings' plan to install a new chief executive (CEO) had not worked out despite considerable efforts by its board and the present CEO, Ms Ho Ching.

MOF was responding to queries from The Straits Times on whether it had any input into the decision-making process that led to the derailing of Mr Charles 'Chip' Goodyear's tenure at Temasek.

MOF is the parent of Temasek, the state-linked investment agency.

On Tuesday, Temasek stunned industry players with an announcement that it was parting ways with Mr Goodyear - less than six months after picking him to be its first foreign CEO - because of differences over strategy.

The 51-year-old American joined Temasek's board in February and became CEO-designate a month later.

He was to succeed Ms Ho, 56, as CEO in October, but will now leave the company on Aug 15. Ms Ho will stay on as CEO.

MOF said the decision not to proceed with Mr Goodyear's appointment was made by the Temasek board and Mr Goodyear, in their mutual interests.

'Temasek informed MOF, but MOF was not involved in the decision,' an MOF spokesman said. 'It is unfortunate that the leadership transition process has not worked out as planned after the considerable efforts by the board and present CEO to find a successor.'

He said the Government remains confident that the Temasek board and management will take the organisation forward successfully and keep its focus on building the long-term value of its portfolio.

Despite MOF's response, observers still want to know exactly what happened. Some speculation has suggested Mr Goodyear's initiatives for change met with poor reception as being too risky.

'I read the reason [Temasek] gave very carefully and I've no idea what it means,' said veteran investor Jim Rogers.

While questions remain about the shock exit, it is likely to be business as usual for the firm, analysts said yesterday. A senior investment analyst based in Singapore, who wished to remain anonymous, said the episode 'hasn't necessarily hurt Temasek as an organisation'.

'The only thing they've hurt in this episode is themselves, in losing the opportunity to put in some good management and have better corporate governance in the future,' he said.

Dr David Lee, managing director of hedge fund Ferrell Asset Management, suggested Temasek farm out a larger portion of money to Singapore-born professional managers. 'In that way, nobody can accuse Temasek of being a total political creature and exert unnecessary pressure on the Temasek CEO.'

Some experts say Mr Goodyear may not have been the best person for the job.

Mr Wong Kok Hoi, chief investment officer of APS Asset Management, said the issue here is 'whether running a business company or a mining company is the same as running an investment company, especially one as important as Temasek'.

Mr Melvyn Teo, associate professor for finance at the Singapore Management University, said Temasek now 'might find it harder to find a new successor'.

'If they want to find someone internal, it's probably not a big issue. But if they want to find someone external, someone of high calibre who's previously worked for a Western company, it might be much harder now that Chip Goodyear has left and no one really knows why.'

This article was first published in The Straits Times.