Malaysia’s FashionValet founders claim trial to breach of trust over US$1.8 million in state-linked funds

According to The New Straits Times, the alleged offence took place at a local bank,  Public Bank Berhad, at its Bukit Damansara Branch in Kuala Lumpur on Aug 21, 2018. 

FashionValet later came under the spotlight after the Ministry of Finance confirmed in a parliamentary reply on Oct 28 that both Khazanah and PNB had sold their minority investments in FashionValet at the end of last year for RM3.1 million.

This marked a significant loss from the initial RM47 million worth of investments in 2018, sparking outrage and calls for investigations as it involved public money. 

Following public backlash regarding the investment loss, Vivy, who is also a fashion influencer with over 1.8 million followers, and Fadzarudin announced their resignations from their respective roles on Nov 1. 

“We take full responsibility for the failure of the investment … We are disappointed in ourselves and regretful that it has come to this … we are very sorry for the controversy this has caused Khazanah and PNB,” read the statement that was posted on Instagram. 

On Nov 2, Prime Minister Anwar Ibrahim, who is also the Finance Minister, ordered Khazanah to conduct an audit following the loss. 

Mr Anwar, who is also the chairman of Khazanah, said the directive is in line with his earlier mandate for the National Audit Department to assess over 2,000 government-linked companies.

MACC confirmed on the same day through a media statement that investigations were ongoing, before posting a video of its officers conducting a raid at FashionValet’s office. 

On Nov 6, local media reported that MACC had seized 11 handbags and a luxury watch worth approximately RM200,000 during a raid at the couple’s home in Mont Kiara, Kuala Lumpur.  

Several personal and company bank accounts valued at around RM1.1 million belonging to the husband and wife had also been frozen, as reported by the Malay Mail.

A prominent figure in Malaysia’s fashion and business industry, Vivy has been awarded accolades, including a place on Forbes’ 30 under 30 Asia list and Young Entrepreneur of the Year at the Asean@50 Achievement Awards in 2017. 

But amid allegations of fund mismanagement, she and her husband have been under intense scrutiny as netizens volleyed criticisms against her for portraying a luxurious lifestyle on social media despite her company not doing well. Her Instagram account has since been made private. 

Established in 2010 by Vivy and her husband, FashionValet has become one of Malaysia’s leading e-commerce platforms and a key player in the country’s fashion and retail sector, offering over 400 brands and 15,000 products, according to local media.