Malaysian Prime Minister Anwar Ibrahim ordered sovereign wealth fund Khazanah Nasional Berhad to carry out an internal audit to investigate issues related to a loss-making investment in a local online fashion retailer.
The Malaysian Anti-Corruption Commission (Macc) also said on Saturday (Nov 2) that it had opened an investigation paper on the matter of investment losses of RM43.9 million (S$13.3 million) by Khazanah and state-owned asset manager Permodalan Nasional Bhd (PNB) in the retailer that it later identified as Fashion Valet.
The probes come days after the Finance Ministry said the two entities invested a total of RM47 million in Fashion Valet in 2018, and eventually sold it for RM3.1 million. Fashion Valet’s co-founders, Fadzarudin Shah Anuar and Vivy Yusof, said on Friday that they took full responsibility for the failure of the investment and would resign.
Fadzarudin said on Sunday that they will fully cooperate with the Macc investigation. Khazanah and PNB did not immediately respond to e-mails seeking comment outside of regular business hours.
A spokesperson from the Prime Minister’s Office confirmed Anwar’s post was in response to the Macc investigation.
The audit is to ensure all government-linked companies “fulfill the demands of their respective responsibilities and functions”, Anwar said in a post on X on Saturday. It “doesn’t exclude” PNB and other parties involved, he said in a follow-up post several hours later.
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Khazanah and PNB’s investment in Fashion Valet was aimed at supporting local tech entrepreneurs and digital retail firms, the Finance Ministry said in a written reply to parliamentary questions last Monday. The total loss from the sale is “very small” compared to the total income that Khazanah and PNB generated that year, it added.
Khazanah in a statement on Friday said that Fashion Valet faced challenges exacerbated by Covid-19, and its divestment “represented a responsible exit” to transfer ownership to a party that could help guide the troubled company. NXBT Partners, which is “led by a seasoned Malaysian entrepreneur”, offered in late 2023 to buy existing shareholders’ stakes and inject capital into the firm, it said.
Fashion Valet’s co-founders said poor decisions led to the investment failure.
“We attempted to expand the business too aggressively, and did not sufficiently plan for a rainy day,” they said in a post on Instagram. BLOOMBERG
