KUALA LUMPUR – Penjana Kapital, the government agency tasked to oversee the RM1.57 billion venture capital fund, has refuted claims of conflict of interest in the selection of foreign fund managers and local partners, as shortlisted firms went through a “rigorous evaluation and due diligence process”.
The Finance Ministry-owned company said in a statement today that an international independent consulting firm was appointed to conduct an open request for proposal exercise between September 11 and 25 last year.
“VC firms must demonstrate, amongst others, extensive knowledge of the tech ecosystem, proper investment strategy and process, proposed talent development and knowledge transfer programmes to be carried out, and a track record of current/previous funds as well as fundraising capabilities.”
It added that a thorough assessment and screening of all proposals were conducted, followed by a verification process.
“Any potential conflict of interest, based on any immediate family ties with those in a decision-making capacity at Penjana Kapital or the independent consulting firm, was also declared by all applicants in their submissions.
“Interviews with shortlisted applicants across different categories were then carried out after a rigorous evaluation and due diligence process by Penjana Kapital’s team and the appointed international independent consulting firm.
“The findings of the evaluation and due diligence were then presented to Penjana Kapital’s investment panel, which evaluated the VC candidates and local partners to be shortlisted and recommended to the board of directors.”
Earlier today, The Vibes reported that two selected local fund managers had links to Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.
According to publicly available records, Tuas Capital Sdn Bhd founder Syed Haizam Syed Jamalullail is linked to Tengku Zafrul through extended ties in the Selangor royal household.
Syed Haizam is the nephew of Sultan Sharafuddin Idris Shah, while Tengku Zafrul traces his lineage to Selangor royalty through his paternal great-grandmother, who was the then sultan’s daughter.
Zafrul’s wife, Raja Datin Sri Johanna Raja Arshad, is the great-granddaughter of the fifth Selangor sultan.
RHL Ventures Sdn Bhd co-founder Raja Hamzah Abidin, meanwhile, is Tengku Zafrul’s cousin. Raja Hamzah’s father is former Federal Territories minister Datuk Seri Raja Nong Chik Zainal Abidin, whose sister – Datuk Raja Zaharaton – is Zafrul’s mother.
Penjana Kapital said while the board of directors also comprises Finance Ministry representatives, “the decision to appoint the eight VC fund managers were solely made based on predetermined criteria and assessment”.
It also stressed that the scheme is a matching fund-of-funds programme, meaning each VC fund manager must raise an agreed amount before it is matched by Penjana Kapital.
“Funds will only be deployed to the fund managers once an investment opportunity has been finalised by the respective VC fund managers.”
Penjana Kapital added that it had played no part in the formation of any of the foreign or local partnerships.
“The VC fund managers that were selected across the VC lifecycle make up partnerships of foreign and local fund managers. Combined, these applicants have fulfilled application criteria by demonstrating strong track records, with a solid team in place.
“Moving forward, they will need to achieve financial performance benchmarks as well as implement a knowledge transfer plan to benefit the local VC ecosystem. The knowledge transfer plan is expected to benefit and develop talent within the fund manager industry and the start-up companies to create 1,800 high-skilled jobs in the medium to longer-term.”
Penjana said it took its responsibilities seriously and executed them with transparency and check and balance, and threatened to take legal action “against anyone that seeks to make any inference or suggestion of any irregularity in respect of the appointments of VC fund managers” for the investment programme.
“Furthermore, unsubstantiated allegations could affect investors’ confidence and derail ongoing fundraising initiatives to support continuous innovation in the country.” – The Vibes, January 28, 2021
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