KUALA LUMPUR, Nov 7 — Last month, Khazanah Nasional Bhd (Khazanah) and Permodalan Nasional Bhd (PNB) sold their stakes in Fashion Valet Sdn Bhd (FashionValet) for RM3.1 million, following a combined investment of RM47 million made in 2018.

The Finance Ministry confirmed the sale in a written reply to Parliament on October 29, responding to a question by Yeo Bee Yin (PH-Puchong) on the total investments by Khazanah and PNB in FashionValet, including losses from devaluation and share divestment.

The resulting loss of over RM43 million has since sparked public criticism and prompted calls for a deeper investigation, with Prime Minister Datuk Seri Anwar Ibrahim directing Khazanah to conduct an internal audit.

What actions have been taken since this disclosure?

Nov 1

• FashionValet founders Datuk Fadza Anuar and Datin Vivy Yusof announced their resignation following public criticism; attributed part of the company’s struggles to the Covid-19 pandemic and operational challenges.

Nov 2

• Anwar said would not intervene in any investigation of the government’s sovereign wealth fund; and directed an internal audit by Khazanah.

• The Malaysian Anti-Corruption Commission (MACC) officially announced investigations into the aforementioned investment losses; Chief Commissioner Tan Sri Azam Baki said the investigation is crucial as it involves the use of public funds and is a matter of public interest.

• Khazanah and PNB defended their investments in FashionValet; and did so to support homegrown and Bumiputera start-ups.

Nov 3

• Capital A Group (formerly AirAsia Group) president Aireen Omar rejected allegations of fraud and abuse behind the losses, saying she was privy to its finances as a director.

• Umno Youth chief Dr Muhamad Akmal Saleh proposed a royal commission of inquiry into the incurred losses.

Nov 4

• MACC raided four locations, including FashionValet’s office, to gather further details about the RM43.9 million public fund losses.

Nov 5

• Vivy and Fadzarudin are quizzed by MACC following the MACC raid.

Nov 6

• Vivy and Fadzarudin are further questioned by MACC.

The backers

Former Damansara MP Tony Pua defended Khazanah over losses incurred from investing in FashionValet, saying failures were more likely than success in the venture capital arena.

Pua also remarked that "some joker” had even suggested a royal inquiry into the matter, a claim he dismissed as excessive and unfounded.

Similarly, Aireen said losses were part of reality for any business and there is no such thing as scandal or fraud or siphoning of money.

She conceded that it was impossible to prevent such speculation, but suggested that critics "have a life and look at other things” instead.

The critics

Akmal has since lashed out at Pua for playing down the RM43 million loss incurred, questioning the wisdom of placing public funds into a company that has consistently posted losses for the last five years.

He said it was equally "extraordinary” that Pua would defend the company’s financial track record, given the long-standing pattern of losses.

Fellow DAP member and Bandar Kuching MP Dr Kelvin Yii also disagreed with Pua’s defence that profits and losses are part and parcel of venture capital investments.

Taking to X (formerly known as Twitter), Yii said there were red flags in FashionValet from the outset, such as a lack of accountability and monitoring despite years of losses.