Argor Capital Management (formerly Go-Ventures) has returned the capital it received for its proposed continuation vehicle (CV) for eFishery, following an investigation into alleged financial irregularities at the company, DealStreetAsia has learnt.
According to sources aware of the matter, while the incumbent limited partners had signed off on selling their shares and the fund structure was in place, no money or cash transaction took place after the scandal broke out, and the vehicle was terminated in January.
Argor Capital did not respond to DealStreetAsia’s request for comment.
DealStreetAsia had reported in December last year that Argor Capital was set to close a $70-million continuation fund to increase its stake in eFishery to 9-10% from 6-7% currently.
The continuation vehicle was designed to not only acquire Argor Capital’s existing stake in eFishery but also to purchase stakes from other investors who had agreed to sell, further boosting the firm’s ownership in the business.
“Once the capital is called in by the fund manager and the deal is consummated, there’s typically little buyers can do. While there is theoretical discretion, Argor did the right thing by its investors and fulfilled its fiduciary obligation to not go along with the transaction, thus, returning the funds to ensure there was no loss of new capital,” according to an industry expert who did not want to be named.
An LP who preferred to remain anonymous emphasised that the failure of the continuation vehicle did not exacerbate negative sentiment towards Southeast Asia. While there has already been caution over investment in the region owing to broader concerns, the collapse of the fund had minimal impact on LPs’ views on the region or its future opportunities.
Continuation funds provide liquidity to legacy fund LPs or allow them to double down on assets. These vehicles have gained popularity due to the challenging exit environment, forcing GPs to choose between liquidity now or fair valuations later.
Aquatech startup eFishery became a unicorn in 2023 after raising $108 million in a Series D funding round led by UAE-based G42 Global Expansion Fund (42XFund), according to regulatory filings. The company raised a total of $200 million in its Series D round last year.
According to DealStreetAsia’s DATA VANTAGE, the firm has raised more than $314 million to date and is valued at $1.4 billion.
It had raised $90 million in a Series C round co-led by Singapore state investor Temasek, SoftBank Vision Fund II, and Sequoia Capital India in January 2022. Existing investors, including the Northstar Group, Go-Ventures, Aqua-Spark, and Wavemaker Partners, also participated in the round.
Last year December, DealStreetAsia first reported that eFishery’s board had suspended its co-founders Gibran Huzaifah and Chrisna Aditya following an investigation into alleged financial irregularities at the company.
Since then, several murky details have emerged about the alleged fraud that is understood to date back to 2018 when the aquatech startup was raising its Series A round. Subsequently, FTI Consulting, the Singapore-based advisor hired by the scandal-hit Indonesian aquaculture startup eFishery’s investors to review its operations, submitted a draft forensic report that paints a grim picture of the once-storied startup.
