Auditors Look Into Concerns Raised About Trade Finance Firm Barak

As Barak Fund Management looks for the green light to reshuffle a large trade finance fund, auditors are looking into concerns raised about the business, Bloomberg reported.

In April, the firm prohibited investors from taking money out of its signature fund as a good portion of its assets became difficult to value. Now, the company is aiming to restructure the fund by separating its hard-to-sell property into novel vehicles, according to Bloomberg.

Some staffers raised concerns with the investment firm in 2020, Bloomberg reported, citing unnamed sources. One cautioned about the potential overvaluation of some property, while two brought concerns to the surface about the caliber of collateral connected to certain loans it provided.

Barak Fund Management told Bloomberg in an email that three complaints came in and two had to do with “allegations of impropriety.”

The company pointed out that the worries surfaced much later than the purported events connected with the complaints occurred and a short time following the start of a redundancy process by the firm in April, which impacted two of the staffers, according to Bloomberg.

In a statement reported by Bloomberg, Barak Fund Management said, “The whistle-blower allegations were reviewed by the fund’s compliance officer, and a second review by an external audit firm will be completed soon. No wrongdoing, corruption, fraud or criminal activity or any other matter impacting the financial statements of any of the funds has been identified.”

Separately, Switzerland’s Credit Suisse earlier this month had to suspend four Luxembourg-headquartered funds that invested $10 billion in supply chain finance, adding to the effects from the collapse of British startup Greensill Capital. The second-biggest bank in Switzerland was a core funding source for the upstart, which was started by both Lex Greensill and Jason Austin.

Credit Suisse is now having to contend with questions from watchdogs and insurers as it works out how to best contend with Greensill’s insolvency filing. Credit Suisse revealed the temporary suspension of the four funds in an investors’ note.