2024 Khazanah-FashionValet controversy
 | |
| Location | Malaysia |
|---|---|
| Type | Financial controversy |
| Cause | Investment losses by Khazanah Nasional Berhad and Permodalan Nasional Berhad (PNB) in FashionValet |
| Participants | Khazanah Nasional Berhad, Permodalan Nasional Berhad, FashionValet |
| Outcome | Public outcry, audit ordered by Prime Minister Anwar Ibrahim, investigation by the Malaysian Anti-Corruption Commission (MACC) |
On October 29, 2024, the Malaysian Ministry of Finance disclosed in a written parliamentary reply that Khazanah incurred a loss in FashionValet along with Permodalan Nasional Berhad (PNB), amounting to RM43.9 million (approximately US $10.74 million) from the sale of their minority stakes in the e-commerce platform co-founded by Malaysian entrepreneur Vivy Yusof. Originally valued at RM47 million, the stakes were sold for RM3.1 million, leading to public scrutiny and demands for transparency.[1]
Background
[edit]FashionValet was established by Vivy Yusof and her husband, Fadzarudin Shah Anuar, and initially focused on offering a curated selection of local and international fashion brands. The platform later expanded to include in-house brands such as dUCK and Lilit, catering to modest fashion consumers.
In 2018, Khazanah Nasional Berhad and PNB invested a combined RM47 million into FashionValet as part of an initiative to support high-potential Bumiputera companies in the digital economy. Khazanah invested RM27 million for a 9% stake, while PNB contributed RM20 million.[1]
The COVID-19 pandemic posed significant challenges for FashionValet, affecting both its physical retail locations and online operations. In 2022, the company pivoted from its multi-brand business model to focus on its in-house labels, but financial difficulties persisted.
By late 2023, Khazanah and PNB divested their stakes to NXBT Partners Sdn Bhd, an investment holding company owned by TIME dotCom CEO Afzal Abdul Rahim, leading to the RM43.9 million loss.[2][3] Sources described the sale to NXBT Partners as a "fire sale", suggesting the shares were sold significantly below their intrinsic value. NXBT Partners reportedly paid approximately US $1.1 million for a 51.25% stake in FashionValet. Financial documents indicated that FashionValet’s cumulative losses had reached RM127.6 million as of December 31, 2023.[3]
Reactions
[edit]The revelation of Khazanah and PNB’s financial losses sparked public debate over the use of public funds in what was perceived as a high-risk private investment. On October 31, 2024, Communications Minister Fahmi Fadzil called on Khazanah, PNB, and FashionValet to clarify the investment, emphasizing the importance of addressing public concerns.[4][5]
On November 1, 2024, FashionValet founders Vivy Yusof and Fadzarudin Shah Anuar announced their decision to step down from their positions. In a public statement, Vivy expressed regret for the impact of the losses on Khazanah and PNB and stated that their exit was intended to allow FashionValet to proceed with its turnaround plans.[6]
On November 4, 2024, the Malaysian Anti-Corruption Commission (MACC) conducted raids at four locations associated with the case, including the offices of FashionValet, Khazanah, PNB, and the Finance Ministry. MACC Chief Commissioner Azam Baki confirmed that the investigation was proceeding under Section 18 of the MACC Act 2009, which pertains to the submission of false claims. MACC seized several financial documents as part of the probe.[7][8][9]
On November 5, 2024, Vivy Yusof and Fadzarudin Shah Anuar were questioned by MACC officials for the first time. They arrived at MACC headquarters in Putrajaya around 2 PM and left late that night. The couple returned for additional questioning the next day on November 6. MACC's ongoing investigation also involves statements from additional witnesses from PNB, Khazanah, and the Finance Ministry.[10]
See also
[edit]References
[edit]- ^ a b Amin, Luqman (29 October 2024). "Khazanah, PNB sold their RM47 mil stakes in FashionValet for just RM3.1 mil — MOF". The Edge Malaysia. Retrieved 6 November 2024.
- ^ Jalil, Asila (1 November 2024). "Khazanah "responsibly exited" FashionValet in late 2023". New Straits Times. Retrieved 6 November 2024.
- ^ a b Khaw, Claudia (6 September 2024). "We investigated FashionValet's alleged "fire sale" with SSM reports, here's what we found". Vulcan Post. Retrieved 6 November 2024.
- ^ Azmi, Hadi (4 November 2024). "US$10 million Fashion Valet fail prompts Anwar to probe Malaysia sovereign fund selections". South China Morning Post. Retrieved 6 November 2024.
- ^ Bernama (31 October 2024). "Let PNB, Khazanah explain RM43.9m losses from selling FashionValet stakes, says Fahmi". The Edge Malaysia. Retrieved 6 November 2024.
- ^ Khaw, Claudia (1 November 2024). "Vivy Yusof, husband exit FashionValet after controversy". The Malaysian Reserve. Retrieved 6 November 2024.
- ^ "MACC confiscates documents from MoF, Khazanah in Fashion Valet probe". Free Malaysia Today. 4 November 2024. Retrieved 6 November 2024.
- ^ Leong, Adeline (5 November 2024). "MACC Raided FashionValet Offices, Vivy Yusof & Husband Called To Give Statement". The Rakyat Post. Retrieved 6 November 2024.
- ^ Mazwin Nik Anis (5 November 2024). "FashionValet founders arrive at MACC HQ to record statement". The Star. Retrieved 6 November 2024.
- ^ Anis, Mazwin Nik (6 November 2024). "FashionValet founders arrive at MACC HQ to be questioned over RM43.9mil losses". The Star. Retrieved 6 November 2024.