Brainjam #7: Khazanah got off fashionably easy
Too many questions unanswered.
On Wednesday, tech site SoyaCincau ran a hilarious piece about how Malaysia’s government AI chatbot got shut down, after spouting rubbish.
Ominous sign for our national AI policy?
Also, I’ve put out a public call on LinkedIn for tips and leads. I’m slowly (operative word here) expanding The Malaysianist to cover regional stories.
In many ways, this is me proving out a minimum viable product (MVP). But, hey, maybe it’s time to take on Southeast Asia while… still somewhat making ends meet covering Malaysia. Ha!
Today’s a Brainjam issue. It’s been a while since I posted one for founding members.
Brainjam is a grab-bag for founding members: part filler, part fun. Expect everything from unstructured notes to political rambles.
If you’re still on the fence, no worries. You can hop on anytime.
This one’s timely: it covers Khazanah’s top brass at the Public Accounts Committee sessions, where they explained the sovereign wealth fund’s domestic investments, including the infamous FashionValet.
The next edition will be back to regular programming for all subscribers: a News, ideas and everything issue or the regional MVP.
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What to make of the PAC’s 103-page report on Khazanah’s domestic investments?
Two of Khazanah’s officials — MD Amirul Feisal Wan Zahir and CIO Hisham Hamdan — were brought in to explain how the sovereign wealth fund approaches investments, particularly in VC and startups.
The trigger was the implosion of e-commerce platform FashionValet last year.
But the hearing was soft. If you want the basics, sure. But the PAC never really pressed the Khazanah officials. In fact, it came across more like chummy chatter.
I’ll dive into some of the details and the gaps in the newsletter, but first, the TLDR:
FashionValet was founded in 2010 by influencer Vivy Yusof and her husband Fadzarudin Shah.
The firm leaned heavily on Vivy’s personal brand, especially through in-house labels dUCk and Lilit.
Despite six consecutive years of losses, Khazanah invested US$7 million (RM27 million) in 2018, buoyed by rapid revenue growth and the presence of overseas backers such as Japan’s Zozotown and US-based Elixir Capital.
By 2022, accumulated losses had ballooned to RM127 million. Khazanah exited in 2024, writing off RM24 million.
The company’s woes burst into the open after a parliamentary reply last year sparked backlash.
Soon after, the MACC charged Vivy and Fadza with criminal breach of trust over RM8 million. The couple denied the charges.
That scandal then drew in the PAC, prompting questions to Amirul and Hisham.
During the PAC hearing, they defended the investment as a standard e-commerce play, the sort of venture that typically burns cash in its scaling years, like Grab or Shopee.
The collapse, they argued, stemmed from costly physical stores and the pandemic.
Still, Amirul described FashionValet as an “icon-driven” model, overly dependent on its founder’s image.
This made the company “highly vulnerable to volatile public sentiment and reputational shocks, including cancel culture”.1
Both men also stressed Khazanah’s diversified approach to startups, where a handful of winners are expected to offset the inevitable flops.
Now to the crux of the issue — what wasn’t discussed but should have been: