US$10 million fashion fail prompts Anwar to probe Malaysia sovereign fund picks

Posted by Admin November 4, 2024 Fashion

US million fashion fail prompts Anwar to probe Malaysia sovereign fund picks

A US$10 million loss of Malaysian state funds invested in a failed online fashion retailer has ignited public outcry and prompted Prime Minister Anwar Ibrahim to order an audit of the country’s nearly US$30 billion sovereign wealth fund.

News that Khazanah Nasional Berhad fund and investment firm Permodalan Nasional Berhad (PNB) had divested their combined 47 million ringgit (US $10.74 million) stake in e-commerce retailer Fashion Valet for just 3.1 million ringgit (US $710,000) broke in parliament on Tuesday.

The revelation has raised questions over the investment selections of Khazanah and comes as Malaysia remains acutely sensitive over state fund mismanagement following the multibillion-dollar 1MDB corruption scandal.

Fashion Valet, helmed by influencer couple Vivy Yusof and Fadzarudin Shah Anuar, aimed to build an online sales platform to take the country’s fashion retailers global, similar to China’s Shein or Temu.

However, the company collapsed in 2022 after struggling through the pandemic. As outcry crescendoed after the state’s losses emerged, the founders apologised on Sunday, saying they were to blame and had expanded “too aggressively.”

“We made the mistake of scaling the company in anticipation of continued growth, and when the pandemic hit, we were left exposed,” the couple said in an Instagram post.

Their apology did little to appease the Malaysian public, who remained unconvinced and criticised Vivy in particular for her display of luxury handbags, including exclusive Hermès Birkins, on social media while Fashion Valet was floundering.