Officials involved in the investigation of fraud in the management of Barak funds

Deny, deny, deny appears to be the strategy adopted by Barak Fund Management, following allegations by whistleblowers about the financial affairs of the Mauritius-based trade finance provider.

According to the company’s website, two sets of allegations were raised in May 2019 regarding the conflict of interest involving the Chief Investment Officer, Prieur du Plessis.

The allegations were raised in connection with the events of 2014-2017, for which the company believes it was “a person who had never worked or was related to the company.” These allegations, after review by independent legal counsel, were resolved without evidence of fraud or wrongdoing, the company said.

In an unrelated prosecution case in April of last year, Du Plessis announced a layoff process. Following this, allegations of wrongdoing arose from three employees who were affected by the dismissal. “Two expressed concern about the quality of collateral attached to some loans it made, while another warned about the overvaluation of some assets,” anonymous sources said at the time.

In June of last year, “an independent legal counsel, a Non-Executive Director of the Fund and a Compliance Officer of the Fund” apparently found no evidence of wrongdoing or fraud. A second investigation by an external audit has yet to take off.

PriceWaterhouseCoopers (PWC) resigned in 2019 as auditor of Barak’s trade finance funds before the 2019 audit was completed and was replaced by Macintyre Hudson. According to Bloomberg, more than one of the whistleblowers had complained to PricewaterhouseCoopers prior to the auditor’s resignation. However, it is unknown if this is related to PricewaterhouseCoopers decision to resign.

According to Biznews, “In 2019, an independent whistleblower alleged a potential conflict of interest related to Du Plessis, who is said to have received cash and use of a motor vehicle from an entity linked to a customer in the coal sector. Barak conducted an investigation and resolved the matter after issuing a warning to Du Plessis, who said the deal was the payment and guarantee of a personal loan, one of the people said. “

According to bnnbloomberg, “Barak’s representative also said that several investors have been contacted in recent weeks by one of his competitors, who is seeking to take over the management of the assets. The firm says it has also determined that certain former employees are now working for the competitor in question. “

While other officials have been implicated, all eyes are on Du Plessis, Barak’s founding member with Jean Craven.

Du Plessis had an excellent career, according to the Barak Fund Management website. He has worked in commodity trading and finance for over 15 years. His career includes stints as director of structured trading and commodity finance at Absa Bank, a subsidiary of Barclays Bank Plc.

Du Plessis also led Standard Bank’s soft commodities origination team and managed Rand Merchant Bank’s commodity trading desk treasury operations, before moving to a commodity finance structured trading position at the bank.

During his tenure at Rand Merchant Bank, Du Plessis was a key member of the team that completed the world’s first successful grain securitization and led the team that established Africa’s third-largest crop insurance company. This is relevant as, according to the company’s restructuring documents, Barak’s illiquid investments comprise more than half of the fund’s assets, in sectors such as coal mining, consumer goods and fertilizer production.

But perhaps the biggest red flag? Du Plessis is a qualified public accountant and completed his public training with PricewaterhouseCoopers, the initial auditor for the firm who resigned in 2019.

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