KUALA LUMPUR: Khazanah Nasional Bhd should include the effectiveness of its investments in its reports, not just its financial performance, says the Public Accounts Committee (PAC).
This was among four recommendations in the PAC's report on the sovereign wealth fund’s investment strategies, said its chairman Datuk Mas Ermieyati Samsudin.
Other proposals include proactive and continuous education for the public on venture capital (VC) investment strategies and opportunities, including the high risks of this model.
“Annual reports, media statements, and other communication platforms should be used to explain the rationale behind the approach taken for certain portfolios and expectations that there will be failed investments as part of the strategy to drive innovation,” she told a press conference in the Parliament media centre here on Thursday (Aug 21).
She added that a standard operating procedure should be established when conducting a post-value analysis on disposed investments with losses exceeding a certain material threshold.
She said reports outlining any causes of failure, process weaknesses and recommendations for improvement must be presented to the Khazanah board audit committee and board of directors to ensure accountability.
Mas Ermieyati said the PAC also recommended that Khazanah strengthen its risk management framework by incorporating more detailed scenario analyses.
“This is particularly to anticipate external shocks, including disruptive technologies, pandemics, geopolitical developments and shifting social sentiments.
“This allows Khazanah to be more responsive in rearranging or leaving its investments when there are drastic changes,” she said.
The recommendations came following PAC proceedings involving Khazanah’s investment in FashionValet, after Khazanah and Permodalan Nasional Bhd (PNB) sold their stakes in 2023.
