What specific due diligence steps did KWAP take before investing in eFishery?

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KWAP's Investment Due Diligence in eFishery Followed Standard Professional Procedures

KWAP undertook a comprehensive investment process for its RM163.4 million investment in Indonesian aquaculture technology startup eFishery, which involved professional fund managers, feasibility studies, and multiple layers of approval by its investment panel and board. The fund confirmed on July 18 that the investment had been made, and it is actively exploring avenues for fund recovery, acknowledging that the eFishery case involved deliberate financial manipulation and misrepresentation of the company's reporting.
Investment Process Under Professional Management

The investment decision-making process for eFishery was managed by professional fund managers, independent of political interference. Prime Minister Anwar Ibrahim, who also serves as Finance Minister, emphasized that individual investment decisions were made by these professionals and did not require Finance Ministry approval. This structure ensures that investment choices are based on financial and market analyses rather than external political considerations.
Rigorous Approval and Auditing Procedures

KWAP's investment panel, composed of professionals, reviewed and approved the eFishery investment. Government representatives are part of the board but do not participate in the day-to-day investment decisions. Furthermore, the eFishery investment underwent multiple rounds of auditing by internationally recognised firms, underscoring a commitment to thorough vetting. Despite these measures, the case highlighted that even extensive auditing by reputable firms cannot always prevent sophisticated financial misconduct.
Confirmation of Investment and Recovery Efforts

KWAP officially confirmed its RM163.4 million investment in eFishery on July 18. The fund stated that the broader eFishery case involved deliberate financial manipulation and misrepresentation of the company's financial reporting. KWAP is presently pursuing all available avenues to recover the invested funds, indicating an ongoing effort to mitigate the financial impact of the situation.
Minority Shareholding and Broader Investor Impact

KWAP holds a minority stake in eFishery, with the majority of shares owned by other investors. These include major global institutional investors who were also affected by the misconduct within eFishery. The former CEO of eFishery, Gibran Huzaifah, was sentenced to nine years' imprisonment for embezzlement and money laundering, a consequence of the deliberate financial manipulation that unravelled the company's rapid rise.

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What specific due diligence steps did KWAP take before investing in eFishery?

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