Two of Malaysia’s most prominent government-linked investment entities, Khazanah Nasional Berhad and Permodalan Nasional Berhad (PNB), are facing intense scrutiny from the public and government officials over significant losses in their recent divestments in FashionValet, the nation’s pioneering fashion e-commerce platform. The investment misstep has raised questions regarding the decision-making processes within the two firms, both of which have historically been tasked with managing and growing public funds.
According to a parliamentary response from Malaysia’s Ministry of Finance earlier this week, the sale of their stakes in FashionValet resulted in a combined loss of RM43.9 million (approximately US$10.1 million) — a staggering 93.4% drop from their initial investment of RM47 million. This revelation has sparked a nationwide debate about transparency, accountability, and the strategic focus of the two influential investment entities.
In 2018, Khazanah Nasional, Malaysia’s sovereign wealth fund, and PNB, a government-linked investment management firm, invested RM27 million and RM20 million respectively in FashionValet, the brainchild of prominent entrepreneur Vivy Yusof and her husband, Fadzarudin Shah Anuar. The platform was launched as Malaysia’s first dedicated fashion e-commerce site, with high hopes of transforming the country’s fashion retail sector and fostering growth for local brands.
However, after five years of operation and mounting financial struggles, FashionValet sold at a fire-sale price of RM3.1 million in 2023 to NXBT Partners, a local investment firm. The result was a substantial loss for Khazanah and PNB, with the total divestment amounting to only 6.6% of their original investment.
Malaysia’s Communications Minister Fahmi Fadzil has stepped forward to urge both Khazanah and PNB to provide a full explanation for their actions, highlighting the fact that their investments represent public funds.
“Since public money is involved, naturally people are asking questions,” Fahmi told reporters. “We are also starting to see content revealing what may have been going on. In the public interest, I believe they should issue a statement,” he added, while acknowledging that both entities should be allowed some time to prepare an official response.
The Unity Government spokesman’s comments have only fueled public calls for transparency, as citizens and social media users alike voiced frustration over what they perceived as a lack of foresight and accountability from both firms.
The Ministry of Finance has defended Khazanah and PNB’s decisions, stating that the original investments were made in line with their respective mandates. In 2018, Khazanah’s goal was to support Malaysian tech entrepreneurs entering the burgeoning e-commerce space. Simultaneously, PNB’s objectives included supporting fast-growing Bumiputera digital retail businesses that could establish themselves as regional players in the fashion market.
FashionValet, at its peak, was a celebrated player in the local e-commerce space, and Vivy Yusof had garnered a massive social media following as a fashion influencer and entrepreneur. However, the company soon encountered escalating challenges. The onset of the COVID-19 pandemic and the rapid growth of competitors posed critical issues for FashionValet’s business model, which relied heavily on online retail at a time when consumer spending and retail supply chains were disrupted.
In 2022, with the company recording increasing losses, Yusof and Fadzarudin announced the closure of FashionValet’s e-commerce platform. Shifting focus, they opted to concentrate on their in-house brands, Duck and Lilit, as FashionValet’s e-commerce operations became unsustainable. Despite these efforts, the company recorded a substantial after-tax loss of RM34.51 million in 2022, nearly triple its 2021 losses, as reported by The Edge Malaysia.
The significant financial losses have triggered a wave of criticism on social media, with netizens expressing dismay and accusing the company of financial mismanagement. Many questioned how FashionValet could amass such losses despite significant public-backed investment. Comments on platforms such as X (formerly Twitter) reflect public anger and suspicion, particularly given Yusof’s high-profile lifestyle and social media presence.
“This is where our money went … one business took all RM43 million funds and lived a super-rich lifestyle,” wrote one user, highlighting the perceived disparity between the company’s financial health and its founder’s lifestyle. Another user questioned the rationale behind Khazanah and PNB’s continued investments, given FashionValet’s persistent losses: “How can both PNB and Khazanah continue to invest (in FashionValet) although the company is continually recording losses? Who decided on the deal?”
In response to the backlash, Vivy Yusof hinted on her social media channels that she would soon release a formal statement addressing public concerns. “There is too much that I want to share but for now, I will allow people to say what they want to say,” she posted on October 30, underscoring the tension surrounding the issue.
Founded as a multi-brand e-commerce site in 2010, FashionValet quickly gained popularity as a platform for Malaysian fashion brands to reach a broader audience. Over the years, it grew from a modest startup to a prominent digital retailer, attracting investment from Khazanah and PNB, both of whom saw it as a promising vehicle for boosting the local fashion industry.
But despite its initial success, FashionValet struggled with operational scalability and market competition. The COVID-19 pandemic amplified these issues, with supply chain disruptions, reduced consumer spending, and intensified competition from regional players like Zalora and Shopee. To mitigate losses, the company shifted its focus from a multi-brand e-commerce model to its own proprietary labels, Duck and Lilit, which continue to operate.
