KUALA LUMPUR: The founders of Malaysian fashion e-commerce platform FashionValet have pleaded not guilty to charges of criminal breach of trust involving RM8 million (US$1.8 million) of investment funds from government-linked companies.
“I understand the charge, I claim trial,” Vivy Sofinas Yusof and her husband, Fadzarudin Shah Anuar said on Thursday when the charges were read before Judge Rosli Ahmad at the Kuala Lumpur Sessions Court on Thursday (Dec 5).
Vivy and Fadzarudin are accused of criminal breach of trust through an RM8 million payment from FashionValet Sdn Bhd to 30 Maple Sdn Bhd, involving investment funds entrusted to them by Khazanah Nasional Berhad and Permodalan Nasional Berhad (PNB).
30 Maple Sdn Bhd is also owned by the couple and the transfer was made without the approval of FashionValet’s board of directors, as reported by Bernama.
Local media reported that both Vivy and Fadzarudin were charged on Thursday under Section 409 of the Penal Code, read together with Section 34 of the same Act. The charges carry a minimum prison sentence of two years, with a maximum of 20 years, along with caning and a fine, if convicted.
The court allowed Vivy and Fadzarudin bail of RM100,000 each but ordered them to report to the Malaysian Anti-Corruption Commission (MACC) office in Kuala Lumpur on the first week of every month, Bernama reported.
“Both of the accused also have to surrender their passports to the court and are not allowed to influence witnesses in the case until the case is completed,” Judge Rosli was quoted as saying by Bernama.
The court fixed Jan 22 next year for the next mention.
Deputy Public Prosecutor Shaharuddin Wan Ladin originally offered bail between RM100,000 and RM200,000 each.
He said the bail amount offered was reasonable due to the severity of the offence, according to The Star.
“We also sought for their passports to be surrendered to the court as there is a flight risk and we need to ensure justice for all parties involved,” he said, as quoted in The Star.
He added that the couple could make applications to retrieve their passports at any time and “on reasonable grounds”.
However, the couple’s lawyer Ashok Athimulan, argued that the bail amount was too high and almost punitive.
He claimed his clients were not a flight risk and had cooperated during the investigation without evading authorities.
“They have four children. They live in Kuala Lumpur and their family is also here.
“They have claimed trial and are looking forward to clearing their names,” he said, as quoted by The Star.
Vivy, 36, was the creative director of FashionValet, while her husband was the chief executive officer. Both recently resigned from their positions.
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.