Pipeline Project

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Disclaimer

Barak Fund Management will not be liable for any special, indirect, incidental, consequential or punitive damages or any damages whatsoever, whether in an action of contract, statute, delict (including, without limitation, negligence) or otherwise that relate to the use of this website. All information contained in this website pertaining to products and services and their terms and conditions, is subject to change without notice.

Although care has been taken as to what is contained in this website, no attempt has been made to give definitive or exhaustive statements of law or any opinions on specific legal issues and no representation is made or warranty given that the information is complete or accurate. This website does not constitute or offer legal or other advice and you should not rely on it as such advice.

Past performance is no guarantee of future returns and the fact sheets provided are for illustrative purposes only. The value of investments and income that are dependent on the performance of underlying assets or other variable market factors may vary from time to time. Investors must take cognisance of the fact that all the information provided are of historic nature.

Use of the website is entirely at the users own risk. Anyone requiring advice on any of the matters referred to herein should consult lawyers or other professionals familiar with the appropriate jurisdiction and legislation.

This Site contains information from Barak Fund Management and about the investment Funds it advisers. The information contained herein does not constitute a distribution, an offer to sell or the solicitation of an offer to buy. The distribution of information contained on this Site and the sale of shares in the Funds may be subject to legal or regulatory restrictions in certain countries in which users are resident or of which they are citizens.

This Site and its contents are being made available for the convenience of the present Investors of the Funds and such other persons expressly authorized by Barak Fund Management (“Authorized Persons”) for information purposes only, provided such Investors and Authorized Persons are not prohibited by any applicable law of any jurisdiction from receiving such information. Persons accessing this Site are therefore required to inform themselves about and observe such restrictions.

Barak Fund is an authorised financial services provider.

Disclaimer

Barak Fund Management will not be liable for any special, indirect, incidental, consequential or punitive damages or any damages whatsoever, whether in an action of contract, statute, delict (including, without limitation, negligence) or otherwise that relate to the use of this website. All information contained in this website pertaining to products and services and their terms and conditions, is subject to change without notice.

Although care has been taken as to what is contained in this website, no attempt has been made to give definitive or exhaustive statements of law or any opinions on specific legal issues and no representation is made or warranty given that the information is complete or accurate. This website does not constitute or offer legal or other advice and you should not rely on it as such advice.

Past performance is no guarantee of future returns and the fact sheets provided are for illustrative purposes only. The value of investments and income that are dependent on the performance of underlying assets or other variable market factors may vary from time to time. Investors must take cognisance of the fact that all the information provided are of historic nature.

Use of the website is entirely at the users own risk. Anyone requiring advice on any of the matters referred to herein should consult lawyers or other professionals familiar with the appropriate jurisdiction and legislation.

This Site contains information from Barak Fund Management and about the investment Funds it advisers. The information contained herein does not constitute a distribution, an offer to sell or the solicitation of an offer to buy. The distribution of information contained on this Site and the sale of shares in the Funds may be subject to legal or regulatory restrictions in certain countries in which users are resident or of which they are citizens.

This Site and its contents are being made available for the convenience of the present Investors of the Funds and such other persons expressly authorized by Barak Fund Management (“Authorized Persons”) for information purposes only, provided such Investors and Authorized Persons are not prohibited by any applicable law of any jurisdiction from receiving such information. Persons accessing this Site are therefore required to inform themselves about and observe such restrictions.

Barak Fund is an authorised financial services provider.

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INVESTOR UPDATE ON RESTRUCTURING AND WHISTLE BLOWER ALLEGATIONS

Dear investor You may have seen further media coverage regarding Barak yesterday. The note below provides further clarity regarding the issues covered in this reporting.


Posted: 18 March 2021

Dear investor

You may have seen further media coverage regarding Barak yesterday. The note below provides further clarity regarding the issues covered in this reporting.

The Restructuring

The restructuring process relates to Barak Fund SPC Limited (the "Company'), and should not be confused with the redundancy process completed in 2020 for Barak Fund Management Limited (the "Fund Manager").

The restructuring process is already underway, and was initiated primarily to segregate those assets that are difficult to value from the rest of the portfolio so that subscriptions and redemptions can resume. The restructuring process is designed to modernise the Company and allow it to offer new products.

The modernisation process requires investor approval. If that approval is not obtained, then the new products will need to be offered via a different legal entity. The Fund Manager believes that it is in all investors' interests for the new funds to be established within the Company as this will facilitate implementation of the measures that are designed to resolve the outstanding issues more efficiently. The second part of the restructuring seeks to address the cause of the suspension of redemptions and subscriptions. As noted, these had to be suspended given the difficulty in valuing the investments in the context of the COVID-19 crisis. The Fund Manager also believes that the lifting of the suspensions will be simplified if the Articles have been modernised.

Investors will be asked to indicate whether they wish to remain invested or to exit the fund. Those who wish to remain invested in the fund will be transferred into the new products created under the first leg of the restructuring. Those who do not wish to continue will receive an initial cash payment representing the portion of the underlying investments that are liquid and readily capable of accurate valuation, with the rest to be paid out to investors in due course.

Fairness to investors is the key driver for the process. We cannot comment on current or potential investors in the fund.

Key to the success of the restructuring process will be the completion of the Annual Financial Statements. The auditors have released the 2019 audited annual financial statements for the Barak Shanta Fund, the Barak Impact Fund and the Barak Asha Fund and are working towards completion of the annual financial statements for the Barak Africa Trade Finance Fund, the Barak Sharia Fund and the Barak Structured Trade Finance Fund.

We would like to clarify that suggestions that the investments of the Company are "frozen" are incorrect. Redemptions from the Fund, as well as subscriptions into the Fund are frozen, given the difficulty in producing accurate valuations for underlying investments in the context of the COVID-19 pandemic. It is important to note that the wider Barak group remains fully operational and is servicing borrowers.

We remain focussed on delivering the restructuring to ensure fairness for all our investors. We are committed, as ever, to keeping you up to date with our progress throughout the restructuring process.

Allegations

During the ordinary course of any business, issues are raised, investigated and dealt with. In the last two years, the independent board of directors (the "Board") of the Company and the Company's Compliance Officer have dealt with two separate sets of allegations. The Board is committed to the highest standards of corporate governance, and acts to ensure that the Company operates according to best practice compliance models and whistleblowing policies. The Board is independent of the Fund Manager and the company is required by Cayman Islands law to have a compliance officer.

2014 -2017 Conflict Allegation

The first set of allegations relate to a conflict of interest involving the Chief Investment Officer that was raised with an employee of Barak Fund Management Limited (the "Fund Manager") in relation to events that took place between 2014 and 2017 (the "Conflict Allegation"). The Conflict Allegation, made by someone who had never been employed by, had never served as a contractor to the Company, and was never connected to the Company, was raised in May 2019. This allegation was reviewed by independent legal counsel, and was resolved in June 2020 on the basis that there was no evidence of wrongdoing or fraud.

2020 Redundancies and "Whistle Blower" Allegations

As management acted to mitigate the impact of COVID-19 on the business, on 23 April 2020, the Fund Manager announced a labour redundancy process. Six days after the process was announced, on 29 April 2020, a list of allegations of impropriety were received from two of the employees affected by the redundancy and a third complainant also came to the fore, who is assumed to also be a former employee of the Fund Manager (the "Whistle Blower Allegations"). The Whistle Blower Allegations are unrelated to the Conflict Allegation.

The Whistle Blower Allegations were received long after the events linked to the allegations took place, and only after the redundancy process had commenced. The Whistle Blower Allegations were reviewed by the Fund's compliance officer, independent legal counsel, and the Non-executive Directors of the Fund, and was resolved in June 2020 on the basis that there was no evidence of wrongdoing or fraud.

A second review by an external audit firm will be completed soon. It is important to note that no wrongdoing, corruption, fraud or criminal activity or any other matter impacting the financial statements of any of the funds has been identified. All of the Whistle Blower Allegations were sent to the auditors and have been considered by both the Fund Manager and the Board. Investors are usually not informed of complaints by former employees, unless there is evidence of material wrongdoing which could affect their investments. In this case the Fund Manager and the Board were satisfied that no further communication was required. 

Read last week’s statement on the restructuring process: http://www.barakfund.com/Media/Media.aspx

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