KUALA LUMPUR: As anti-graft investigators start probing FashionValet’s continued losses, an MP has questioned why the investors did not back out before the losses spiralled to RM43.9mil.
Petaling Jaya MP Lee Chean Chung said it was important Khazanah Nasional Bhd explain why it invested in FashionValet.
“Khazanah has to clear the doubts by explaining the reasons for the investment and why it did not intervene or exit early,” Lee posted on X, formerly Twitter.
“If investing in a basket of high-risk tech companies is bound to have losers, then show us who the winners are,” he said.
Lee’s questions echoed a remark by Bandar Kuching MP Kelvin Yii, who disagreed with former Damansara MP Tony Pua’s claim that profits and losses are part and parcel of venture capital investments.
According to Yii, there had been red flags in FashionValet from the outset, such as a lack of accountability and monitoring despite years of losses.
“There were no Khazanah or Permodalan Nasional Bhd (PNB) personnel on board to monitor or advise, which may have managed the losses in the beginning,” Yii said, also on X.
“Although Pua’s arguments are not without merit, we need to take out the ‘emotions’ on this matter and the investigations should be on governance and accountability.
“It cannot be a witch hunt which may stifle future venture capital ecosystems,” he added.
In a Facebook post on Monday, Pua said criticisms against FashionValet have been “misguided and unfair”, as they focused mainly on the percentage of losses while ignoring the broader context of venture capitalism.
He said the venture capital landscape was inherently risky, with more failures than successes.
“Out of 10 investments, three or four will be disasters, another three or four will be about covering costs and another two or three will make spectacular returns.
“If we want to be in this game of creating regional or even global unicorns, we must be prepared to incur disasters,” said Pua.
Umno Youth chief Datuk Dr Muhamad Akmal Saleh hit back at Pua, saying that while profits and losses are normal in business, it was extraordinary for large amounts of public funds to be poured into a company that had posted losses for five consecutive years.
“It is even more extraordinary when someone tries to defend it,” he said.
Dr Akmal said a normal Malaysian would find it difficult to borrow even RM10,000 for their own business.
