KUALA LUMPUR – Heads must roll over Khazanah Nasional Bhd’s and Permodalan Nasional Bhd’s (PNB) RM43.9 million losses through failed investments in Fashion Valet Sdn Bhd (FashionValet), said Dr Kelvin Yii (Bandar Kuching-PH) in the Dewan Rakyat today.
While debating the Budget 2025 in the lower house, Yii questioned why there had been no calls for action after the two government-linked investment corporations (GLICs) sold their shares in FashionValet for RM3.1 million in a fire sale last year, after jointly investing RM47 million in 2018.
Yii said accountability should be practised the way Singapore’s state investment firm, Temasek Holdings Ltd, did.
“Even in Singapore, its Temasek has incurred losses and thanks to (a culture) of accountability, there were those who were forced to resign,” said the DAP MP.
In 2009, then Temasek chairman, Ho Ching – the wife of former Singapore prime minister Lee Hsien Leong – resigned after Temasek lost US$39 billion, or 31% of its holdings at that time within eight months in 2008.
Khazanah, in defending its RM27 million investment in FashionValet, recently said the company had faced challenges during the Covid-19 pandemic which led it to focus on its own brands, Lilit and dUCk, instead of the original objective for FashionValet to be an e-commerce platform for local Bumiputera entrepreneurs.
Khazanah also explained the fire sale of its shares in FashionValet in late 2023 as a “responsible exit” to transfer ownership of the company to another party that would be able to guide it to new growth.
PNB, meanwhile, assured the public that no funds from the unit trust subscribed by the public were used in its investment in FashionValet.
Yii today questioned how the two GLICs could have made investments in an entity that incurred millions of ringgit in losses for several years, and yet did not put in place any monitoring processes, accountability mechanisms or safeguards.
No investor would ignore losses and allow them to continue, he added.
“So what are the safeguards that need to be in place when it comes to investments so that the profits and losses of these investments can be controlled?
“(How do we) monitor and provide advice to those who received our investment?
“Are we going to give them RM40 million and let them do whatever they want (with the money)?” he added.
Scoop today reported on FashionValet’s own company annual reports which showed that it had consistently recorded losses from 2017 until 2022, even after Khazanah and PNB invested RM47 million into the e-commerce platform.
Selection criteria for investments
Yii today also questioned why FashionValet received investments from the GLICs when other companies such as Grab Holdings – founded by a Malaysian in 2012 under the name MyTeksi – did not receive the same help when requested.
Grab moved to Singapore in 2014, which Yii described as a missed opportunity.
He also said the RM47 million investment received by FashionValet was a hefty sum, asking how the quantum was decided.
“I have read that this investment was made to support the Bumiputera industry which I fully support, but the funds could have been spent well to benefit hundreds of both Bumiputera and non-Bumiputera-owned businesses
“There are many startups founded by the youths that have to go overseas to look for funders as they are being (treated) like beggars in their own country.
“What is the selection process so that all Malaysians can enjoy the (investments) and not just those with good connections and the elites?” Yii asked.
Although Khazanah and PNB’s fire sale of their stakes in FashionValet was late last year, a parliamentary reply last week by the Finance Ministry stating their RM43.9 million loss has ignited debate and calls for accountability.
The Malaysian Anti-Corruption Commission has begun a probe into the losses incurred by the two GLICs. – November 4, 2024
