Wind Down Framework
Winding Down Framework Disclosure
1. Our Commitment to You
Wahed Real Estate operates under the Securities Commission (SC) Malaysia's Regulatory Sandbox — a supervised environment designed to ensure that innovative investment products like fractional real estate crowdfunding are held to the highest standards of investor protection, even while they are being tested.
As a condition of our participation in the Sandbox under Chapter 11 of the SC Regulatory Sandbox Guidelines (SC-GL/1-2025), we are required to have — and to clearly disclose — a plan for the orderly winding down of our platform. This document fulfils that requirement.
2. When Could a Wind-Down Occur?
A wind-down of the Wahed Real Estate platform would only be triggered in one of two situations:
| Trigger | Scenario | What This Means |
|---|---|---|
| Regulatory | SC Malaysia formally directs us to cease Wahed Real Estate operations (e.g., the sandbox test is deemed unsuccessful) | The SC — Malaysia's independent capital market regulator — may determine that the Wahed Real Estate product requires changes before it can be commercially deployed. This is a standard exit path under the sandbox framework, not an indication of wrongdoing. |
| Business | Wahed Real Estate voluntarily decides to discontinue the product | Wahed Real Estate may, with SC consent, decide to discontinue the product for commercial or strategic reasons. This cannot occur unilaterally — SC approval is required. |
3. Who Oversees the Wind-Down?
In the event of a wind-down, Wahed will immediately establish a Wind-Down Working Committee (WDWC) — a dedicated oversight body with clear authority and accountability. It will report weekly to the Wahed Board and monthly to the SC until all wind-down activities are complete.
| Committee Member | Role During Wind-Down |
|---|---|
| Wahed X Sdn Bhd (Platform Operator) | Overall accountability for investor communications, regulatory notifications, and fund reconciliation |
| Wahed Group Risk Function | Monitors risks, escalates critical issues to the Board, ensures AML/CFT compliance throughout |
| Wahed Global Services Sdn Bhd (General Partner of LLPs) | Manages funded property LLPs, coordinates asset management or orderly liquidation |
| Compliance Officer (Appointed) | Coordinates all reporting to the SC and ensures procedural adherence |
| AmanahRaya Trustees | Independent trustee overseeing client fund reconciliation and investor asset protection |
4. What Happens to My Investment?
Your experience during a wind-down depends on the stage your investment is at when a trigger event occurs. Below we explain each scenario clearly.
4A. If Your Investment Is in an Active or Incomplete Campaign
If you have committed funds to a fundraising campaign that has not yet reached its target and closed:
- The campaign will be suspended within 5 business days of the trigger event.
- All funds held in escrow (i.e., not yet deployed into any property) will be fully refunded to you within 10 business days.
- You will receive a direct communication within 5 business days explaining the reason for suspension and your refund timeline.
- A dedicated investor support channel will remain open throughout the process.
4B. If You Are Already an Investor in a Funded Property
If you have already invested in a property through Wahed Real Estate, your investment is held as a fractional equity stake in a Limited Liability Partnership (LLP) — a legally recognised business structure in Malaysia that holds the property on behalf of all investors as Limited Partners.
The winding down of the Wahed Real Estate platform does not dissolve the LLP or end your investment. Your legal rights as an equity partner remain fully intact. What changes is only the question of who manages the property on your behalf.
There are two pathways — we will pursue the preferred option first:
Option A — Preferred: Continued Management (No Disruption to You)
Wahed Global Services Sdn Bhd (WGS), the appointed General Partner of each LLP, continues to manage the property on behalf of all investors, exactly as planned.
Under this arrangement:
- Rental income distributions continue on schedule, directly to your Wahed account.
- Property management (tenancy, maintenance, compliance) remains with Wahed's panel of specialists.
- You will receive quarterly or semi-annual performance reports covering rental income, occupancy, expenses, and exit timeline projections.
- The property proceeds to its planned exit at the end of the investment term (typically five to six years), at which point sale proceeds are distributed to all investors proportionally.
- No additional fees will be introduced as a result of the wind-down.
Option B — Contingency: Orderly Property Sale (If Required by the SC)
If the SC determines that WGS may not continue managing the property LLPs after the sandbox period, an orderly, supervised liquidation of each property will be initiated. This is a contingency — not our preferred or expected outcome.
The steps under this pathway are:
| # | Action | Indicative Timeline |
|---|---|---|
| 1 | SC notified; investor announcements issued; Liquidation Action Plan submitted to SC for approval | Within 3 business days |
| 2 | Independent property valuation commissioned from a licensed valuer | Within 30 days |
| 3 | Property listed for sale via licensed real estate agents; sale conducted at fair market value | 60–120 days upon obtaining valuation |
| 4 | Sale proceeds received into the LLP's dedicated bank account; outstanding liabilities (taxes, legal fees, operating costs) settled in priority order | Upon completion of sale |
| 5 | Net proceeds distributed to all investors proportionally based on their equity contribution | Within 10 business days of sale completion |
| 6 | Each investor receives a written Liquidation Summary, final financial statements, and payout confirmation | Immediately after distribution |
| 7 | LLP formally dissolved with the Companies Commission of Malaysia (SSM); final report submitted to the SC | Within 3 months of sale |
5. How Are Investors Protected?
Regardless of which wind-down scenario applies, the following protections apply to every investor at all times:
| Protection | What This Means for You |
|---|---|
| Segregated Investor Funds | Your investment funds are held in a dedicated account separate from Wahed X's operating funds. These monies are overseen by AmanahRaya Trustees and can only be deployed for the specific purpose you authorised. |
| Legally Enforceable LLP Agreement | Your rights as an equity partner (Limited Partner) in the property LLP are enshrined in a legally binding Partnership Agreement. These rights survive any platform wind-down and cannot be unilaterally altered. |
| SC Regulatory Oversight | The SC is notified of all wind-down activities and receives periodic progress reports. The SC retains the power to issue directions to protect investor interests at any point (Chapter 13, SC-GL/1-2025). |
| 7-Year Data Retention | All investment records, legal agreements, campaign documents, and financial statements are securely retained for a minimum of seven years in accordance with SC record-keeping guidelines. You can request access to your records at any time. |
| Continuous Investor Support | A dedicated support channel (realestate.mys@wahed.com) remains operational throughout the entire wind-down period until all obligations are settled. |
| AML/CFT Compliance Maintained | Anti-money laundering and anti-terrorism financing controls remain active throughout. All distributions and asset proceeds are subject to enhanced monitoring during wind-down to protect the integrity of the process. |
6. Key Risks You Should Be Aware Of
The following risks are specific to a wind-down scenario. These are in addition to the general investment risks disclosed in the Wahed Real Estate Risk Disclosure document.
| Risk | Description | Mitigation |
|---|---|---|
| Forced liquidation at unfavourable market price | If the SC requires immediate property sale, market conditions at that point may result in proceeds below projected returns or below your original investment amount. | Independent valuation will be commissioned. Licensed agents engaged. SC-approved Liquidation Action Plan ensures process transparency. |
| Delay between wind-down trigger and asset resolution | Property sales take time. During this period, you may not receive rental income and your capital remains tied to the property. | Holding periods and exit rights are defined in the LLP Agreement. Wahed builds a cash reserve buffer into each property's financial model. |
| SC restricts WGS from continuing as General Partner | If the SC directs that Wahed Global Services cannot manage existing LLPs post-sandbox, Option B (liquidation) becomes mandatory regardless of market conditions. | Wahed will engage with the SC proactively. All LLP agreements already designate WGS as GP, creating a strong legal basis for continuity. |
| Costs incurred before wind-down | Wahed absorbs any sunk costs (e.g., legal fees, due diligence costs) related to campaigns that were underway at the time of wind-down. These are not passed on to investors. | Wahed monitors sandbox performance continuously and avoids committing to new campaigns if wind-down appears likely. |
7. How We Will Communicate With You
In any wind-down scenario, timely and honest communication is our first obligation. Here is what you can expect:
| Communication | Content | Timeline |
|---|---|---|
| Initial Notice (All Users) | Formal announcement of wind-down; reason; what happens next; how to get support | Within 5 business days of trigger |
| Funded Property Investors | Status of your specific LLP; which option applies (A or B); your rights and next steps | Within 5 business days of trigger |
| Active Campaign Investors | Campaign cancellation; confirmation of full refund; refund timeline | Within 5 business days of trigger |
| Quarterly Updates (Option A) | Rental income collected and distributed; property performance; expenses; exit timeline | Until planned exit |
| Liquidation Summary (Option B) | Final financial statements; net proceeds calculation; payout confirmation | Immediately after distribution |
| LLP Dissolution Report (Option B) | Final accounting of all proceeds, expenses, and investor payouts | Within 3 months of sale |
For all enquiries related to your investment, including during any wind-down period, please contact: realestate.mys@wahed.com
8. Terms Explained
We have used plain language throughout this document. Here are definitions for any technical terms:
| Term | Plain Language Meaning |
|---|---|
| Limited Liability Partnership (LLP) | The legal vehicle that holds a property on behalf of all investors. Registered with SSM (Companies Commission of Malaysia). |
| Limited Partner (LP) | You — as an investor, you hold fractional equity in the LLP and are entitled to proportional rental income and sale proceeds. |
| General Partner (GP) | Wahed Global Services Sdn Bhd — the entity that manages the property and LLP operations on behalf of all investors. |
| Escrow Account | A ring-fenced bank account where your investment funds are held safely until a campaign successfully closes and a property is acquired. |
| AmanahRaya Trustees | An independent Malaysian trust company appointed to provide oversight and reconciliation of investor funds, ensuring they are properly safeguarded. |
| FREC | Fractional Real Estate Crowdfunding — the investment product offered by Wahed Real Estate, allowing multiple investors to collectively invest in a single property. |
| Sandbox / SC Regulatory Sandbox | A supervised testing environment operated by the Securities Commission Malaysia, allowing innovative products to be offered to real investors under regulatory oversight. |
| WDWC (Wind-Down Working Committee) | An internal committee established specifically to manage and oversee the wind-down process, with members from Wahed X, Wahed Global Services, and the Wahed risk team. |
| SSM | Suruhanjaya Syarikat Malaysia — the Companies Commission of Malaysia, which registers and governs LLPs. |
The Securities Commission Malaysia does not recommend nor assume responsibility for any information disclosed in relation to this fundraising exercise.
Wahed X Sdn Bhd is a registered market operator with the Securities Commission Malaysia, operating under the SC's inaugural Regulatory Sandbox programme. Wahed Technologies Sdn Bhd is a Digital Investment Manager (DIM) licensee issued by Securities Commission Malaysia (eCMSL/A0359/2019). All investments carry risk, including the potential loss of principal. Past performance does not guarantee future results. This disclosure is issued pursuant to Chapter 11 of the SC Guidelines on Regulatory Sandbox (SC-GL/1-2025) and should be read together with the full Risk Disclosure and the LLP Investment Agreement applicable to each campaign.
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