KUALA LUMPUR: Following the FashionValet scandal, the Finance Ministry stated that government-linked investment companies (GLICs) will continue to improve their governance practices, particularly concerning investment evaluation and ongoing monitoring processes.
“With regard to investments in FashionValet by Khazanah Nasional Berhad (Khazanah) and Permodalan Nasional Berhad (PNB), the investments of these two institutions are managed as part of a portfolio whose performance is assessed based on the overall portfolio, rather than on individual investments alone,” the ministry said in a parliamentary written reply dated Nov 6.
It said that the Public Accounts Committee (PAC) found that the investment by Khazanah and PNB into FashionValet had undergone reasonable due diligence.
“FashionValet suffered losses due to internal factors, namely its risky omnichannel strategy, as well as external factors such as the Covid-19 pandemic and changes in consumer behaviour in the post-pandemic period,” said the Finance ministry.
It said that although venture capital investments are high-risk, they are crucial in stimulating innovation, nurturing start-ups, and strengthening Malaysia’s long-term competitiveness.
The ministry stated that the government takes the losses incurred by companies linked to GLIC seriously.
It added that members of the Board of Directors (BOD) and company management are required to carry out their fiduciary duties to protect the company’s interests from any losses or leaks resulting from misconduct or negligence, as stipulated in the Companies Act 2016.
“If found guilty, the involved directors or management may face disciplinary action or prosecution in court, including charges such as breach of trust and failure to fulfil fiduciary responsibilities,” it said.
The ministry was responding to a question by Lim Lip Eng (PH-Kepong) on the action taken against individuals or the management of GLICs who are found guilty of causing losses due to negligence or misconduct, including the case of the FashionValet investment.
