The minority directors of Dasin Retail Trust CEDU (DRT) are continuing to disagree with the trust’s majority directors and have resisted the resolutions passed by the DRT’s board of directors to replace Zhang Zhongming, legal representative and executive director of its China subsidiaries, says DRT’s manager in an Oct 7 release.
This comes on the back of the trust’s major directors' beliefs that “severe internal control and corporate governance concerns” are at risk if Zhang maintains his current role.
The trust says grounds for such concern include the lack of cooperation of the relevant Chinese personnel in providing operating and financial information to the board of DRT’s manager for its quarterly condensed consolidated financial statements as at Dec 31, 2023, and the lack of progress in relation to the collection of the long outstanding receivables from associates of the minority directors amounting to $14.3 million as at Dec 31, 2022.
On July 23, the trust registered Wang Peng, acting CEO of DRT’s manager, as the legal representative and executive director of its subsidiaries Zhuhai Xinmingyang Investment and Zhuhai Doumen Dasin Metro-Mall Commercial Management in replacement of Zhang.
On Aug 28, DRT’s manager issued a letter of demand to the minority directors for breaching their duties in their capacity as director and alternate director of the REIT’s manager. This included failing to inform the board and failing to take action to recover significant amounts of rent in arrears which were owed by Dasin Metro-Mall Merchant Investment to the trust’s wholly owned subsidiary pursuant to the relevant master lease.
Currently, Zhang has refused to comply with the directions of the board to change the legal representative and executive director of its China subsidiaries, reads the release.
See also: Elite UK REIT to divest Hilden House for GBP3.3 mil
A notice of hearing for revocation of registration dated Aug 30 had since been issued by the Zhuhai Authority, as announced by the trust on Sept 3.
The trustee-manager says it is currently consulting with its advisers on the further steps to take to effect the replacement of Zhang as legal representative and executive director of the China subsidiaries.
Units in Dasin Retail Trust closed 0.6 cents lower, or down 15.4% down, at 3.3 cents on Oct 7.
