Yii's remarks come in response to former Damansara MP Tony Pua’s defense of the investment, where Pua argued that losses are an inherent risk in venture capital.
While Yii acknowledged Pua's points on the high-risk nature of venture capital, he highlighted the need for stricter accountability measures, pointing out that red flags were present from the very start of the Fashion Valet investment. Yii cited issues like the absence of Khazanah or PNB representatives on Fashion Valet’s board, which could have helped monitor operations and mitigate early losses.
“Investing large sums without oversight, under the label of 'high-risk venture capital,' is not justifiable,” Yii posted on X, emphasizing that adequate governance should always be a priority to ensure value addition and risk management.
This call for greater scrutiny underscores growing concerns about the management and decision-making processes within government-linked investment companies, especially when public funds are at stake. Yii Questions Fashion Valet’s Valuation and Calls for Accountability Over GLC Investment Losses.
Bandar Kuching MP Dr. Kelvin Yii has raised concerns about the initial valuation of Fashion Valet, which was reportedly pegged at RM300 million by Khazanah Nasional. Yii questioned whether this valuation was justified and stressed that such large assessments require thorough explanation and accountability, especially when government-linked investment funds (GLCs) like Khazanah and PNB are involved.
Yii acknowledged some of former MP Tony Pua’s points on the risky nature of venture capital, where failures often occur alongside potential successes. However, he emphasized that an investigation should focus on governance and accountability rather than turning into an emotional “witch hunt,” which could negatively impact Malaysia’s venture capital environment.
Pua, in a Facebook post, argued that critiques of Fashion Valet’s losses were “misguided and unfair.” As a former political secretary to the finance minister, he explained that losses are expected in venture capital, where typically, out of ten investments, three or four may result in losses, while a few generate exceptional returns.
According to a recent parliamentary response, Khazanah invested RM27 million and PNB RM20 million in Fashion Valet in 2018, both taking minority stakes. The funds lost RM43.9 million, selling their shares last year for just RM3.1 million to NXBT Partners, an investment holding firm led by TIME dotCom’s CEO, Afzal Abdul Rahim.
The Malaysian Anti-Corruption Commission (MACC) confirmed that it has begun questioning witnesses from Khazanah, PNB, and the finance ministry, and will summon Fashion Valet founders Vivy Yusof and Fadzarudin Anuar. Vivy and Fadzarudin announced they would step down from their management roles to take responsibility for the losses.
*Video from FMT Youtube Channel
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