At 00.21 hours on 2 April 1940 U-38 fired one G7e torpedo from a distance of only 300 meters on a steamer at the end of a small convoy in low visibility due to bad weather about 20 miles southeast of Fair Isle and observed how the ship disappeared in a dense cloud of smoke and vapor after a hit on port side amidships. The Signe (Master Bengt Mattsson) was reported missing after falling 5 miles behind convoy HN-23A in the evening of 1 April, presumably due to engine troubles. HMS Sikh (F 82) (Cdr J.A. Giffard, RN), escorting convoy, reported an explosion at the time of the U-boat attack and searched the area behind convoy, but found nothing. On 4 April the body of a crew member was found on a raft by the British trawler Good Shepherd six miles north-northeast of Fair Isle.