Pua: Disasters like FashionValet expected in venture capital investments
Published: Nov 5, 2024 1:45 PM
Bad investments like FashionValet are part of known risks in making capital venture investments, said former lawmaker Tony Pua.
The former political secretary to the finance minister from 2018 to 2020 said that there will always be more failures than successes in ventures.
“The venture capital game is to expect that out of 10 investments - three or four will be disasters - like FashionValet - three or four will just about cover cost, while two or three make spectacular returns,” he said on Facebook yesterday.
He was commenting on the backlash against FashionValet over an RM44 million loss in value that Khazanah Nasional and Permodalan Nasional Berhad (PNB) suffered.
Khazanah and PNB invested in the clothing brand in March 2018, two months before Pakatan Harapan took power that year.
Where’s the evidence?
In his post, Pua did not discount the possibility of wrongdoing in FashionValet but remarked that critics have not furnished any evidence to back up such claims thus far.
The former Damansara MP warned that overt criticism will create a culture where decision-makers will not take risks.
“FashionValet was always going to be a high-risk investment. So was Grab, in its early days.
“When Khazanah didn’t invest in Grab in its early days, and Grab moved its HQ to Singapore due to the availability of funds there, we were critical that we missed the boat.
“So we can’t have it both ways. You can’t be pissed if we didn’t invest, and be pissed when we did,” Pua said.
FashionValet co-founders Vivy Yusof and her husband Fadzaruddin Shah Anuar took responsibility for the Khazanah and PNB losses after the matter came to light last week.
The company is under MACC investigation over the losses while Prime Minister Anwar Ibrahim has ordered Khazanah to conduct an internal probe.
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Yii disagrees with Pua on FashionValet venture: 'Can't shoot blindly'
Published: Nov 5, 2024 9:00 PM
DAP Youth chief Dr Kelvin Yii today said he disagreed with party veteran Tony Pua’s views on FashionValet Sdn Bhd, adding there were red flags in the government’s investment in the company.
Responding to a Malaysiakini post on X, the Bandar Kuching MP said issues included FashionValet’s initial inflated value as well as lack of monitoring and accountability over the years.
“Cannot just give a huge sum of money and allow one to shoot blindly without accountability at the guise of ‘high-risk VC investment’,” Yii (above) said.
Yesterday, Pua said bad investments like FashionValet are part of known risks when it comes to making capital venture investments, as there will always be more failures than successes in such cases.
He was commenting on the backlash against FashionValet over a RM44 million loss that Khazanah Nasional and Permodalan Nasional Berhad (PNB) suffered.
Former Damansara MP Tony Pua
The government-linked investment companies paid RM47 million for a minority stake in the local fashion firm in 2018 and sold off their shares to NXBT Partners Sdn Bhd for RM3.1 million in 2023.
However, Yii conceded that Pua made some good points.
He said emotions must be set aside when discussing this issue and that investigations must focus on accountability and governance aspects.
“(This) cannot be a witch hunt which may stifle future venture capital ecosystems,” he warned.
In a statement last Friday, FashionValet co-founders Vivy Yusof and her husband Fadzaruddin Shah Anuar said they would step down from the company.
The company is now being probed by the MACC while Prime Minister Anwar Ibrahim has ordered Khazanah to conduct an internal probe.
Meanwhile, Petaling Jaya MP Lee Chean Chung agreed with Yii, calling for Khazanah to clear the public’s doubts.
In a post on X, Lee said Khazanah must justify its reasons for investing in FashionValet and why the sovereign wealth fund did not back out earlier.
“If investing in a basket of high-risk tech companies (is) bound to have losers, then show us who are the winners?” he asked.
The government-linked investment companies paid RM47 million for a minority stake in the local fashion firm in 2018 and sold off their shares to NXBT Partners Sdn Bhd for RM3.1 million in 2023.
However, Yii conceded that Pua made some good points.
He said emotions must be set aside when discussing this issue and that investigations must focus on accountability and governance aspects.
“(This) cannot be a witch hunt which may stifle future venture capital ecosystems,” he warned.
In a statement last Friday, FashionValet co-founders Vivy Yusof and her husband Fadzaruddin Shah Anuar said they would step down from the company.
The company is now being probed by the MACC while Prime Minister Anwar Ibrahim has ordered Khazanah to conduct an internal probe.
Meanwhile, Petaling Jaya MP Lee Chean Chung agreed with Yii, calling for Khazanah to clear the public’s doubts.
In a post on X, Lee said Khazanah must justify its reasons for investing in FashionValet and why the sovereign wealth fund did not back out earlier.
“If investing in a basket of high-risk tech companies (is) bound to have losers, then show us who are the winners?” he asked.
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