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Believe it or not! Five years continuous losses but Khazanah and PNB value Fashion Valet at RM300m?
KUALA LUMPUR, Nov 5, 2024: Malaysia’s so-called Sovereign Wealth Fund (SWF) Khazanah Nasional Berhad and Permodalan Nasional Berhad (PNB) valued Fashion Valet Sdn Bhd at RM300 million despite it suffering five years of continuous losses.
And they allegedly gave majority control to Vivy, her husband and father.
Does that make any business sense? Prudent and competent business investment?
No News Is Bad News reproduces below The Coverage posting on the issues:
Khazanah & PNB Valued A 5 Year Continual Loss FashionValet At RM 300 Million Valuation – Both Gave Majority Control To Vivy, Her Husband & Father Majority Control!
5 November, 2024
The public pressure was unbearable that the owner of FashionValet (FV), Vivy Yusof and Fadza Annuar officially apologised and resigned from the company.
Off course, they have to resign now that Afzal and his company, NBXT Partner have majority control. Its unlikely of him to keep the never profitable FV team. Otherwise, the member of the BOD of CIMB would be seen as in collusion.
Khazanah too issued a statement and cited the Covid 19 pandemic as the primary reason for the company’s failure.
A member of the Board of Director of FV, former CEO of Air Asia Berhad, and current President of Capital A Berhad, Irene Omar too spoke of the fnancial devastation of the pandemic on businesses including Air Asia.
Frankly she better put her life in order because she will be facing public scrutiny and someone could be facing “life sentence” for trying to cover-up for allegation of squandering public money.
Scoop.my’s Arjuna Mohanakrishnan revealed that FV was a loss making entity before and after Khazanah and PNB invested in the portal. It means Khazanah was misleading the public for directing the blame to Covid and hiding the fact that they overvalued the investment in FV.
The startling revelation is, as extracted below:
In 2018, the year sovereign wealth fund Khazanah and fund management firm PNB invested RM27 million and RM20 million, respectively, into FashionValet, the company recorded losses of RM20.18 million in losses after tax – a steep RM9.4 million increase from the previous year.
Edge wrote: “Separate wheat from chaffe, please“. NST reported the following headline:
Sabah Media’s Wan Azrain revealed that the RM27 million paid by Khazanah represented only 9% of the company,.
It means Khazanah management valued the loss-making (or more precisely never profitable company) at RM300 million. Is that a reasonable valuation?
That was invested in early 2018.
Not only, Khazanah and PNB pumped in RM47 millon for the loss-making company which they described as “promising homegrown e-commerce fashion platform”, both gave majority control to Vivy, Fadza and Vivy’s father, Yusof Perancis majority control!
That’s mind boggling, but do hold on to your fire. That’s not mind blowing enough yet.
Sometime in late 2018, around September, FV bought over 30 Maple, the supplier and owner of the Duck brand of tudung or these days it is more appropriate to be called *ucked-up brand for RM95 million.
Is it possible Vivy and her husband cashed out of their financial commitment to dump the company to FV and get paid handsomely?
So is it fair to accuse they “legally” enriched themselves but at the expense of public money in which Khazanah and PNB allowed it by giving the “anak beranak” (family) control?
Bodoh tak Khazanah and PNB?
So then, is the stupid decision by Khazanah and PNB made consciously by them or it is forced on them?
This leads to the politically video of You-Tuber Aswardy Morni (below). Be reminded that this blog cautioned about playing politics on this issue, however, the buck must stop somewhere.
If it does not stop at the management committee or Board of Directors, it could move up the Ministry and all the way to the Minister, in which Azmin Ali was the then Economic Minister.
The portfolio of government investment agencies were shifted by Mahathir and Daim away from Lim Guan Eng to Azmin!
Now then, why did Irene Omar gallantly defended FV to the point of losing her cool? Other than the fact that she is a member of the Board of Director of FV, why do another Naemah Daim?
This could be guesswork but one connot not notice the similarity of Air Asia with Tony Fernandez as the face of the product and Vivy Yusof as the face of FV.
Meanwhile the financial brain of Kamaruddin Meranun lies in the background of Air Asia. Similarly, the brain of FV was the husband and father who preferred to stay in the background.
Probably Vivy is a woman initiative to create a successful icon of young woman. Nothing wrong there as long it is legitimate and genuinely profitable.
Or perhaps because there is similarity of FV to Air Asia in seeking forgiveness for the reconstituted RM63.5 billion debts and given a 99.5% debt haircut to restructure RM33.7 billion liabilities.
That’s public money in Khazanah and PNB owned banks and listed companies similarly slashed like RM43.7 million investment reduced to a firesale of RM3.1 million.
Tell that to the millions of Malaysian entrepreneurs, who were denied opportunity by someone born with a silver spoon and adjucated bankrupt by banks and government agency for mere droplets of failure.
They would be cussing at all these people getting away scot free after making humongous loss.
Source : Thick Brick Blogspot
FashionValet posted losses 5 straight years before Khazanah, PNB investment
FashionValet Sdn Bhd (FV) in the limelight due to investment losses incurred by Khazanah Nasional Bhd and Permodalan Nasional Bhd (PNB), saw five consecutive years of losses prior to their investment.
A check of financial account filings of the company between 2012 and 2017 showed that its losses widened to RM10.7 million in 2017 from RM166,793 in 2012, prior to Khazanah and PNB’s investment in the company in 2018.
The financial information was obtained from filings with the Companies Commission of Malaysia (SSM).
In the year in which Khazanah and PNB invested in the company, it recorded a net loss of RM20.19 million.
The company’s current liabilities in 2012 exceeded current assets by RM401,248 before it improved in 2017 to a net asset position of RM1.24 million.
Interestingly between 2015 and 2017, total assets grew almost 300 per cent to RM14.7 million, while total liabilities grew more than 100 per cent to RM11.7 million.
Khazanah and PNB invested RM27 million and RM20 million, respectively, into FV in 2018.
Business Times has reached out to Khazanah and PNB to clarify the innvestment criterias met which had led to their investment in 2018, given FV’s financial track record in 2017.
A Khazanah spokesperson referred Business Times to its previous statement, while PNB is yet to respond.
Previously, Khazanah said that FV was a promising homegrown e-commerce platform when it invested RM27 million for a nine per cent stake in 2018 with more than 400 brands and 15,000 products and expecting revenue growth of about 60 per cent annually.
“Our investment rationale was anchored on the theme of Offline-to-Online e-commerce, as well as a commitment to support Malaysian entrepreneurs and promising early-stage companies,” it said in a statement.
Meanwhile, the Ministry of Finance (MoF) in a written reply to a query published on the parliament website last Monday said PNB’s investment was to support the rapidly growing Bumiputera digital retail company to become a regional retail platform for Malaysian brands.
MoF said the sale of Khazanah and PNB’s interest in FV to NXBT Partners Sdn Bhd represented a responsible exit to a strategic investor who could continue to assist FashionValet in addressing its financing needs holistically and reviving its business in a challenging industry environment.
As of Sept 30, 2024, NXBT Partners Sdn Bhd is FV’s biggest shareholder with 51 per cent, or 2.5 million stakes, followed by Datuk Fadzaruddin Shah Anuar (17.7 per cent) and Vivy Sofinas Yusof (17 per cent).
NXBT Partners is wholly-owned by Afzal Abdul Rahim, the chief executive officer of TIME dotcom Bhd and CIMB Group Holdings Bhd senior independent director.
Its last financial filing with SSM showed that FV posted a net loss of RM34.5 million against RM112.8 million revenue for the financial year ended Dec 31, 2022.
RM47 million investment down the drain?
Well its Business As Usual as some would say. Businesses take off, be successful, take a tumble, go down the drain, might get back up again. Or not! While Khazanah & PNB look at it as Business As Usual, I beg to differ. FV was never a good business proposition to begin with. It’s a fashion platform for premium products? Like seriously? Firstly, who decide they are premium?
Anybody can tell a designer to design a silk tudung cladded with sequin or even diamonds and call it premium. Anybody can do it and call it premium. Do they become premium? No. Made of expensive materials don’t necessarily mean premium. But that’s basically their products, right? Making something expensive even more expensive. That’s their definition of premium. You know what’s premium? Premium takes time to build.
Reputation that takes decades to build. Using names (in this case designers) that are well known for their quality and excellence, and then you use high quality expensive materials to make them. Then yes, then they can become premium. Now who is your designer? VY? Vera Yang? Nope.. its Vivy Yusof. Who???? Exactly So how is FV considered premium? Because they said so?
Whoever approved those investments had no idea about the business in the first place. You think FV stands for what, Fookie Vuitton? And it’s supposedly an online marketplace? Is it? Where? On the internet? Like everyone else???? Why not give the money to everyone else?
They wanted to compete with the likes of Zalora, Lazada? Err ambitious, I give them that. I’d praise them but would I give them even a million? Absolutely not. They never had scalability. That’s the number 1 consideration for business growth. Scalability. Zero. None. Scalability is difficult for premium products because as the country would know it by now after all the T15 hoohaa, we only have 15% of the working force (not the population), that can even afford anything premium. And if that 15% is mostly the non-Malays, how many % will buy your tudung?
And then again, you’re only premium because somebody who is a nobody said its premium. And then somebody somebody sitting on the investment board decided to believe in a nobody who said she’s somebody.
You know what RM47 million can do? That’s 27,647 months worth of minimum wage, a possibillity to take 2303 homeless folks off the streets and putting them to minimum wage employment for a year. And feed their children as well. And you know what 2303 people on minimum wage can create? An industry P/S: You want to know why your ASB/ASN/ASW dividends are low? Because of stupid PNB investments like this.
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