KUALA LUMPUR: Khazanah Nasional Bhd has welcomed the findings and recommendations of the Public Accounts Committee (PAC) on its (Khazanah) past investment in FashionValet and the broader approach to domestic venture capital (VC) investments, as part of its overall mandate and mission in advancing Malaysia.
Khazanah had explained its domestic VC strategy in its sessions with the PAC, including the high risk nature of investments such as FashionValet.
“In addition, we provided a comprehensive overview of our overall investment governance framework, which includes a multi-stage approval approach as well as an independent risk and transaction review,” it said in a statement today.
“As mentioned by the PAC, FashionValet’s business strategy was impacted by unforeseen external shocks, particularly its omnichannel strategy, as well as by the Covid-19 pandemic and shifts in consumer behaviour. Nevertheless, we acknowledge the PAC’s assessment and lessons learned, including its recommendation to enhance public communication on Khazanah’s VC strategy, its high risk nature and our role in driving innovation,” it added.
It also recorded appreciation to the members of the PAC for their acknowledgement and recognition of the rigorous internal processes, which ensure that Khazanah’s investment decisions are conducted in line with the highest standards of governance.
The sovereign wealth fund said it remains committed to supporting Malaysia’s entrepreneurial and VC ecosystem. “VC investments, though inherently high-risk, are essential to driving innovation, nurturing startups and ultimately strengthening the nation’s long-term competitiveness. Given the riskiness of VC investments, evaluating the success of a given VC investment programme necessitates a portfolio approach,” it added.
Concerning internal processes, Khazanah expressed appreciation towards the guidance from the PAC and welcomed the opportunity “to continuously refine and enhance our processes.”
“Among others, Khazanah holds a monthly Portfolio Management Committee (PMC) meeting which reviews issues, including, but not limited to, risk management, portfolio company updates and post-mortem reviews of all our investments, on top of our regular Investment Committee (IC) meetings,” it said.
Khazanah reiterated that it would strive to balance financial discipline with nation-building objectives, guided by strong governance and clear accountability. “This will ensure sustainable long term value creation, while positively contributing to Malaysia’s socio-economic development,” it said.
In 2018, Khazanah invested RM27 million in minority stakes in FashionValet. – Bernama