Failed US $20m lingerie deal laid bare
Azmin says this shows sovereign wealth fund strayed from original objectives
KHAZANAH’S investment in Indian online lingerie startup Zivame had to be written off when the e-commerce business failed, the Dewan Rakyat heard yesterday. Datuk Seri Azmin Ali says it is the latest in a series of doubtful ventures by the sovereign wealth fund.
FOUR days after an expose of Khazanah Nasional Bhd’s alleged investment in a non-strategic stake in Swiss Bank UBS, which is said to have deviated from its mandate, another investment by the sovereign wealth fund is being questioned.
Economic Affairs Minister Datuk Seri Azmin Ali revealed that Khazanah Nasional had invested US$20 million (RM81.3 million) in an online lingerie company, which showed that it had strayed from its true focus.
“In the government’s opinion, Khazanah Nasional has to function as what was set, and details can be given for us to review its role,” he said, adding that the investment had to be terminated.
He was responding to former prime minister Datuk Seri Najib Razak (Barisan Nasional-Pekan) in Parliament yesterday, who disputed the claim that Khazanah Nasional had veered from its original objectives.
Najib interjected
Azmin’s winding up by questioning Prime Minister Tun Dr Mahathir Mohamad’s claim that Khazanah Nasional had strayed from its true focus.
“In 10 years, Khazanah Nasional’s assets had increased from RM33 billion to RM134.5 billion. So, in terms of wealth creation in the last 10 years, it had succeeded,” Najib said.
Khazanah Nasional had invested in an Indian online lingerie startup called Zivame in 2015, a venture aimed at helping women buy undergarments online. The Bangalore-based company was set up in 2011.
It was Khazanah Nasional’s maiden investment in India’s booming e-commerce industry.
Zivame, which means “radiant me” in Hebrew, was co-founded by Richa Kar to tap into the online retail market for undergarments in India, where buying lingerie is seen as an awkward experience for women there.
Azmin said investments like these resulted in the government to reorient Khazanah Nasional’s role and put it back on track.
On Monday, it was alleged that the fund had invested in a nonstrategic stake in Swiss Bank UBS, which led to economists and analysts questioning whether the sovereign wealth fund had deviated from its core mandate.
The RM3 billion investment in UBS was wiped out following the collapse of Lehman Brothers in 2008, as the shareholding in UBS was held in accounts managed by the failed Wall Street bank. However, Khazanah Nasional managed to recover about half of its investment several years later.