The founders of FashionValet are accused of misuse of funds involving RM8 million. They have pleaded not guilty

In 2019, Vivi Yusof and spouse Fadzarudin Shah Anuar received Malaysia Tatler’s Entrepreneurship Award. Photo: vivyyusof/Instagram

In the days during which Malaysia’s high-profile power-couple attended interrogations by the Malaysian Anti-Corruption Commission, media camera crew caught them entering the MACC’s headquarters in Putrajaya, looking nothing like the glamorous duo they had projected themselves to be, as two of the leading lights of the country’s e-commerce space. The reputational spiral of Vivy Yusof and her husband Fadzarudin Shah Anuar, the two founders of the e-commerce platform FashionValet, has been swift after the couple released a joint statement on Instagram, apologising for the “failure” of the business they started in 2010, despite a 2018 funding valued at RM47 million. Both stepped down from their respective roles in the company. MACC swiftly began their investigations into suspected professional impropriety, culminating in the charges read to them in court earlier today.

In the Kuala Lumpur Sessions Court, Ms Yusof and Mr Anuar have been accused of “the common intention to commit CBT (criminal breach of trust)”, according to the New Straits Times (NST). This was in 2018, when the couple allegedly made a RM8 million (or about S$ 2,560,000) payment from the account of FashionValet (also now referred to as FVGroup) to that of 30 Maple, the parent company of the couple’s own labels, Duck and Lilit. The monetary move was supposedly conducted without the approval of the board of directors of FashionValet. The couple was quoted saying to the court: “I understand the charge. I claim trial.” If found guilty, both face “a minimum sentence of two years and a maximum of 20 years in jail, whipping, and a fine, upon conviction,” according to Malaysian media.

FashionValet store at the Publika Shopping Gallery in Mont Kiara, Kuala Lumpur. Photo: Huplek Interiors

For observers of the case, the CBT charge does not adequately explain the significant losses that FashionValet incurred, leading to the “fire sale” of the RM27 million and RM20 million investments of Khazanah Nasional Berhad (the sovereign wealth fund of the Government of Malaysia) and Permodalan Nasional Berhad (PNB, a Malaysian government-linked investment company) respectively in FashionValet for a shocking RM3.1 million. That amounted to a RM43.9 million loss for the investors (a separate “internal audit” has been requested by PM Anwar Ibrahim into Khazanah’s sale of FashionValet). The charges shed a dim light on manoeuvres on the part of Ms Yusof and Mr Anuar with regards to the company they founded that launched with considerable fanfare 14 years ago. Notably, Ms Yusof and her sister Intan Safina Yusof now share something in common: Both have been charged with CBT.

That it should come to this possible criminality is disappointing to many of Ms Yusof’s fans. She has always believed that she is a born entrepreneur, and they hold her to that ideal. In her memoir The First Decade: My Journey from Blogger to Entrepreneur (a recurrent word in her career), she wrote: “the entrepreneur in me came out at the early age of seven.” And there was no stopping her. In an interview with the podcast Life Confessions, she said, “My personal belief is that entrepreneurs are born.” Throughout the book, she wrote of entrepreneurial verve and the derring-do that the young managing their early risky enterprises are not opposed to, such as going to the Apple store and “putting up the FashionValet.net website on every Mac” in there to make up for the lack of marketing budgets and platforms. But, allegedly channelling funds meant for one business to another, without the knowledge of investors of the former is more than just a seemingly clever childish prank.

Fadzarudin Shah Anuar and Vivy Yusof (centre) arriving at the Kuala Lumpur Sessions Court this morning. Screen shot: NST Online/Youtube

In The Last Decade, Ms Yusof wrote: “If there’s something you have to know about me is that I’m very competitive.” It is not certain if it is this strong desire to compete that has led to the troubles of FashionValet. Or if her emulous nature had spawned poor financial judgments. FashionValet’s lack of success in the latter half of its existence was attributed to the COVID 19 pandemic and the lockdowns that impacted many businesses. In their apology note shared on Instagram (both of their accounts have now been set to private), the founders wrote that the failure of FashionValet was because they “attempted to expand the business too aggressively, and did not sufficiently plan for a rainy day.” But it had not been clear skies for FashionValet for a while, at least since 2013. According to one NST report, the company “posted losses five straight years before the Khazanah and PNB investments”.

Despite her competitive ways and a head start in the online modest fashion marketplace, Ms Yusof was not able to fend off competition posed by more established players entering the market, such as, and in particular, Zalora. She could not take the heat. She wrote in her memoir: “There were a lot of moments when we felt really small. Constantly compared to a giant, how can you feel powerful?” In 2022, FashionValet met its fate. Its founders decided to close it. Ms Yusof wrote on FashionValet’s IG page: “As they say, all good things must come to an end… and be replaced with something better.” FashionValet soon became FVGroup (based on the initial of the couple’s first name, as was the first letters of the two nouns of the original moniker), and the primary e-outlet for their own brands Duck and Lilit, both came about because FashionValet’s “stock problem was one that could never be solved,” she wrote in her book, as they had to deal with more than 400 (some reports claim 500) brands of varying supply capabilities.

Vivi Yusof posing in her office a month before the 10th anniversary of FashionValet. Photo: viviyusof/Instagram

Both Duck and Lilit are closely tethered to the story of its creator Vivy Yusof. Founded in 2014 and 2019 respectively, they eventually came under the umbrella of 30 Maple. It is not clear when the parent company of the two brands was formed, but speculations suggest that it was registered around the same time as Duck’s founding. Operating with little fanfare, 30 maple was in 2018 sold to FashionValet for RM95 million, which was more than what Khazanah and PNB invested in the platform in the same year. Critics were alarmed by the sale of 30 Maple. They said the transaction indicated internal acquisition of assets from FashionValet’s own co-founders, which could mean that public funds were used for transfer deemed to be the proverbial left-pocket-to-right-pocket deal. Neither of the couple has explained the sale of 30 Maple to FashionValet. Or why it was necessary. It is not known how the money gained for 30 Maple was subsequently used. Or if that was FashionValet’s aggressive business expansion plan.

At the time of the sale, media reports asserted that 30 Maple was profitable, earning RM8.5 million and RM7.745 million in 2017 and 2018 respectively. Duck started as a predominantly tudung (head scarf) brand, while Lilit is a modest clothing line. On reducing the hundreds of brands once available on FashionValet to just two of their own, Ms Ysuof told Says media at the time, “we saw a trend of businesses expanding their own channels to sell directly to consumers, which is great for the booming local fashion industry.” In 2022, Ms Yusof said in statement quoted by the Malay Mail, “All our investors are invested in the entire Group which comprises the third-party brands platform, Duck and Lilit. Since we have institutional investors, everything we do requires board approval and our investors are supportive of our pivot.” It is, therefore, startling for many that the couple are now charged for the RM8 million transfer made from FashionValet to 30 Maple purportedly without the knowledge of the former’s board of directors.

Fadzarudin Shah Anuar during FashionValet’s 2017 campaign #Iamhomegrown. Photo: fadzaanuar/Instagram

Vivy Yusof met Fadzarudin Shah Anuar in London, in 2005, five years before FashionValet was formed. It was during their undergraduate days, when both were on rather different academic paths: she read law at London School of Economics, while he was pursuing an aeronautical engineering degree at Imperial College London. But the twain did meet although, by her account in The First Decade, “it was not love at first sight”. In fact, they did not seem to have a good impression of each other. “I found him obnoxious because he barely said a word to me,” she wrote, “and he found me bimbotic because I was carrying a designer bag.” It was a preference that would continue to characterise her personal style to this day (interestingly, she did not carry one to court this morning). In fact, her love of luxury bags has prompted Netizens to wonder how she managed to acquire that many for herself unless she drew a substantial salary from her business. But a love of expensive bags did put the brakes on what would soon be a budding romance. As she conceded: “Our entire university lives revolved around one another.”

As both could not find work in London after graduation, they decided to return to Malaysia. Back on home turf, their “lightbulb moment”—Ms Yusof is rather fond of clichés and biz-speak (such as “pivot”)—has been recounted and romanticised so often that it now requires no mention. Surprisingly (perhaps not), they were able to get FashionValet going in practically little time (the website was completed in a month!) and after the initial hiccups, the platform seemed to be off to a good start. Ms Yusof wrote that “things were going really well.” After two years, she said, “we were growing 100 per cent in sales every year. The first month of operations saw an encouraging RM30,000 of sales. At the end of the first year, FashionValet chalked up RM720,000. And then RM1.2 million in the second, and then RM3.2 million in the third. And in 2018, the fateful RM47 million investment in FashionValet, and the rest was the unexpected saunter that led to their court appearance this morning.

Vivy Yusof and Fadzarudin Shah Anuar in 2010, at the start of FashionValet. Photo: vivyyusof/Instagram

Now that the couple has decided to claim trial, there is the possibility that their story would be made clearer, even if it could be to their reputational detriment. In the Malay chat show Wardah Heart to Heart early this year, Ms Yusof told host Dayah Bakar that “every mother would want their kids to look at them and say, ‘I’m so proud of my mom’. She has her values, she works hard in very honest ways to pay for our education and all our Roblox (online game) money”. Interestingly, in the entire interview, Ms Yusof answered the questions posted to her in English (that is usually part British, part American) with a smattering of Malay. Until she set her IG account to private, Ms Yusof’s very last post was about one of her sons. She is, no doubt, deeply proud of her children. Still, it is tempting to wonder what she will say to them one day about the scandal now obliterating the doubtless hard work invested in FashionValet.

“Fashion is not my love. My love is business,” Ms Yusof told Wardah Heart to Heart (she has, in fact, said that many a times prior). She continues to identify an an “entrepreneur” even when she has been in the trade for 14 years and a CEO for at least a couple now, after she took over the role from her husband. “I knew from the get-go, I didn’t want to be a lawyer; I did not take the bar [exam]. The idea was for me to join the family business.” That turned out to be short-lived, as she chased her own dreams and made the enterprise she once co-owned with her husband a reality and one that led her to be made a listee in the annual BOF 500 (2022). “The whole journey is really about storytelling,” Vivy Yusof had said. And that narrative now may include a brush with the law other than those slanders of the past (including one alleged plagiarism). “After so many levels of fitnah (scandal) coming to you,” she said in that podcast, “I don’t know at what point do you ever recover from it.”

Update (5 December 2024, 16:00): The court set bail of RM100,000 plus surety each for Vivy Yusof and her husband Fadzarudin Shah Anuar. Both of them have to surrender their passports and report to MACC on the first week of each month. Later in the morning of the court proceedings, the couple was informed that they would face “an additional joint alternative charge for dishonest misappropriation”, according to NST. No further detail was provided. According to the prosecutor, “this serves as an early notice to the defence and to the court”. The case is set for mention on 22 January 2025.