The trustee-manager of Dasin Retail Trust CEDU (DRT), Dasin Retail Trust Management (DRTM), on Aug 3, has asked its minority investors to allow it to hold the extraordinary general meeting (EGM) requested by the latter. This is in response to a July 31 letter issued by a group of the trust’s minority investors.
The group first sent a letter to DRTM on June 13 requesting an EGM to vote on several resolutions. As at the date of the letter, the unitholders, Aqua Wealth Holdings, Feng Guomin, Michael Chui and Zhang Shenming, hold a total of 101.17 million units representing 12.57% of the voting rights in the REIT. Aqua Wealth Holdings’ and Feng Guomin’s units are held by DBS Nominees.
In their letter, the unitholders have requested for approval to be given to amend the deed of trust constituting DRT. The deed is dated Jan 15, 2016 and was amended by the first supplemental trust deed on Dec 27, 2016. The proposed amendments aim to enhance DRT’s governance and transparency by strengthening the oversight of unitholders and promoting accountability, stated the letter.
“This will ensure the trustee-manager act in unitholders’ best interests, leading to better decision-making and a more transparent and accountable governance structure,” the letter added.
The unitholders are also requesting for FTI Consulting to be terminated as the REIT’s advisor with immediate effect. DRT, on Jan 9, 2023, announced the appointment of FTI Consulting as its advisor to conduct an independent review of the REIT and its subsidiaries.
“The primarily purpose of the independent business review is to assess and validate the financial position of the group,” said DRT at the time. “These findings will be used as a basis to progress loan extension discussions with the various lenders of the offshore facility 1, onshore facility 1, offshore facility 2, offshore facility 3 as announced on Jan 2, 2023.”
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In the unitholders’ letter, they add that a new advisor should be appointed by the unitholders based on the decision made by a committee of unitholders comprising representatives – including the requisitionists – holding over 50.0% of the total units in DRT. The new advisor will help with the restructuring of DRT’s financial obligations, said the unitholders in their letter.
Another letter, dated July 31, was sent by Chui for and on behalf of the requisitionists stating that DRT’s trustee-manager had breached the Business Trusts Act 2004.
Under the Act, DRT’s trustee-manager must serve the notice of EGM under the requisition notice within 21 days and convene the EGM immediately. “Such an EGM must be held within two months of the date of deposit of the requisition notice i.e. before Aug 20,” say the unitholders in their letter.
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“Furthermore, under the Act, amendment of the trust deed must be passed by special resolution. In turn, notice of a special resolution must be duly given at least 21 days in advance of the meeting at which it is passed. The last day for this special resolution notice to be given to meet the EDM deadline was before July 30,” they add.
“The requisitionists have written to DRTM to repeatedly request DRTM to comply with the above timeline prescribed by law, but have only just received an email from the [trustee-manager’s] counsel today, advising that the [trustee-manager] will convene the EGM by end September 2024. DRTM has also issued an SGXNet announcement today, July 31, 2024, containing the same information.”
As the trustee-manager is too late in giving the proper notice required in order to pass the special resolution to amend the trust deed by the EGM deadline, the requisitionists note that unitholders representing over 50% of the total voting rights of the REIT may convene an EGM themselves. However, any meeting convened must not be held after the expiry of three months from that date.
“Given the failure of DRTM to comply with the Act, the requisionists will proceed to exercise our rights under the Act to convene the meeting within three months of the date of deposit of the requisition notice,” reads the letter. The requisitionists add that any expenses incurred from holding the EGM will be claimed from DRT.
In its Aug 3 announcement, DRT’s trustee-manager said that amendments to the trust deed requires the approval of Singapore Exchange S68 Securities Trading Limited (SGX-ST) per the listing rules.
“It is in all unitholders’ interest to ensure that the amendments proposed to be made to the trust deed can be effected in accordance with the listing rules,” says the trustee-manager.
“Further, as stated in the trustee-manager’s announcement dated July 14, Clause 1.8 of the trust deed provides that, in the event of conflict between any provision of the trust deed and the listing rules, the listing rules shall prevail,” it adds. “It is not in the interest of the unitholders as a whole to hold an EGM where it is possible that the proposed amendments to the trust deed cannot be effected even if the proposed resolutions are passed.”
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The trustee-manager also said it intends to seek clarification on whether any of its unitholders are required to abstain from voting on the resolutions per Clause 17.2.2 of the trust deed. The Clause states that “a director of [the trustee-manager] shall not vote on any units held by him in respect of any contract or arrangement or any other proposal whatsoever being proposed for [DRT] in which he has any personal material interest, directly or indirectly”.
The trustee-manager also cited Rule 748(5) of the listing rules, which states that “[t]he custodian, investment manager, any of their connected persons and any director of the investment fund and investment manager, is prohibited from voting their own shares at, or being part of a quorum for, any meeting to approve any matter in which they have a material interest”.
In addition, the trustee-manager noted that it had acknowledged that it would not be able to hold the EGM before Aug 20.
Finally, the trustee-manager said that it will “use its best efforts” to convene an EGM by the end of September this year.
“In the event that the EGM is not convened by end September 2024, the trustee-manager shall co-operate with the requisitionists to convene the EGM in the same manner as nearly as possible as that in which meetings are to be convened by the trustee-manager and pay to the requisitionists any reasonable expenses incurred by the requisitionists by reason of the failure of the trustee-manager to convene the EGM by end September 2024,” it adds.
Units in Dasin Retail Trust closed 0.3 cents higher or 13.64% up at 2.5 cents on Aug 2.
