KUALA LUMPUR: Khazanah Nasional Bhd has received recommendations to establish a standard operating procedure for conducting post-analysis on every divested investment incurring losses beyond a specific material threshold.
Public Accounts Committee chairman Datuk Mas Ermieyati Samsudin stated that such analysis reports must detail failure causes, process weaknesses, and improvement recommendations for board review.
“PAC has found that Khazanah does not have an SOP related to the post-analysis for every investment that has been disposed of that incurs losses exceeding a certain material limit,” she explained during a Parliament press conference.
The committee also advised strengthening Khazanah’s risk management framework to include deeper scenario analysis of non-financial market shocks.
These shocks encompass technological disruptions, pandemics, geopolitical changes, and social sentiment shifts requiring responsive investment restructuring.
Mas Ermieyati further emphasised Khazanah’s need to proactively educate the public about venture capital strategies and their inherent high-risk nature.
“Annual reports, media statements, and other communication platforms should be used to explain the rationale behind the portfolio approach and the expectation that some investments will fail as part of the strategy to drive innovation,” she added.
The PAC proceedings involved three key witnesses from the Ministry of Finance and Khazanah’s senior management team.
Committee findings confirmed Khazanah maintains layered internal governance processes for investment screening and approval.
“Monitoring mechanism by MoF was also found to be at the strategic level and did not interfere with the daily commercial operations, in line with good governance practices,” Mas Ermieyati noted.
The FashionValet investment failure resulted from high-risk strategy, COVID-19 market shocks, and post-pandemic consumer behaviour changes despite rigorous due diligence. – Bernama