KUALA LUMPUR (Oct 29): Malaysia's sovereign wealth fund Khazanah Nasional Bhd and asset manager Permodalan Nasional Bhd (PNB) sold their collective stakes in the country’s first fashion e-commerce platform Fashion Valet Sdn Bhd (FashionValet) for a mere RM3.1 million — a significant loss from their initial RM47 million investments.
Khazanah invested RM27 million into FashionValet in 2018 while PNB put in RM20 million, both for minority stakes in the company, according to the Ministry of Finance's (MOF) written reply published on Parliament's website on Monday evening.
Khazanah and PNB then sold their stakes at the end of 2023 to NXBT Partners Sdn Bhd, an investment holding company controlled by Afzal Abdul Rahim, the chief executive officer of TIME dotCom Bhd (KL:TIMECOM). Khazanah also holds a 32.34% stake in TIME dotcom, as of July 22 this year.
The ministry was responding to a question from Puchong MP Yeo Bee Yin, who asked for details of the transaction, and if other government-linked companies or government-linked investment companies had also invested in FashionValet.
Khazanah had earlier last month made a statement to address what it termed as misconceptions regarding the asset disposal, which had been described as a fire sale by a tech newsletter and stirred heated discussions online about the valuation of the transaction. Khazanah was reported as saying that as a private market investor, it "regularly invests in and divests from assets based on our investment horizon and portfolio allocation strategy".
"Losses incurred from the stake sale were minor in comparison to Khazanah and PNB’s overall earnings for the year," MOF said in its written reply on Monday.
“The sale represents a responsible exit by Khazanah and PNB, transferring FashionValet to a strategic investor positioned to meet the company's financial needs and support business growth," it said.
MOF also defended Khazanah's investment into the company, saying it aligned with Khazanah's mandate at the time to foster local tech entrepreneurs and gain exposure to the growing e-commerce sector.
"At the same time, PNB’s investment thesis was focused on supporting fast-growing Bumiputera digital retail companies to develop into a regional retail platform for Malaysian brands." it added.
NXBT now owns 51.25% of FashionValet, according to data from the Companies Commision of Malaysia. The second largest shareholder is Datuk Fadzarudin Shah Anuar, husband of fashion influencer Datin Vivy Yusof, holding 17.65%, followed by MyEG Capital Sdn Bhd — a subsidiary of MyEG Services Bhd (KL:MYEG) — with a 5.78% stake.
Co-founded by Vivy and Fadzarudin, FashionValet initially focused on third-party fashion items before launching its own modest wear brands, dUCK and Lilit.
The company has been loss-making for the past three consecutive years. In the financial year ended Dec 31, 2022 (FY2022), it incurred a loss-after-tax of RM34.51 million — more than triple its RM9.63 million loss in FY2021 — as revenue fell 0.62% to RM112.82 million from RM113.52 million. In FY2020, the company reported a loss-after-tax of RM12.37 million on RM84.5 million in revenue.
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