On April 22, Sabana Industrial REIT’s manager released a letter from SGX RegCo which has cleared up questions on who can vote at EGMs with extraordinary resolutions. This is when a super majority is needed for, as an example, when an S-REIT’s Trust Deed needs to be amended. “SGX RegCo is of the view that there is no requirement under the SGX-ST Listing Rules for the Sponsor and its related parties to be disenfranchised from voting on the Trust Deed Amendments,” the letter says.
“We note that the Trustee has filed an originating application with the High Court of Singapore to seek, among other things, a declaration that the Trustee is at liberty to convene an extraordinary general meeting to consider the Trust Deed Amendments,” the SGX RegCo letter adds.
HSBC Institutional Trust Services (the Trustee) has made an Order 32 application with the High Court. Order 32 allows for an action to be brought in the Singapore courts for the determination of any question arising in the execution of a trust (including Sabana Industrial REIT).
Separately, on March 25, Quarz Capital Asia requisitioned for a third EGM in a year. The original seven resolutions were amended/ changed to six, and posted on SGXnet on April 19. The first resolution is to direct the Trustee NOT to amend the Trust Deed related to authorising Sabana Industrial REIT to hold unlisted shares in a company providing internal REIT management functions. This is a strange resolution as there has already been precedent for EGMs to amend Trust Deeds.
In the same tone, resolutions 2, 3, 4 and 5 are to direct the Trustee NOT to amend other aspects of the Trust Deed despite the Trustee stating that material changes to the Trust Deed are required to allow for an internalised S-REIT.
Meanwhile, questions from unitholders for the AGM to be held on April 23, showed some concern over rising directors’ fees. In particular a unitholder pointed out that directors’ fees rose by 20%.
See also: Changes in ICR, leverage to come into effect immediately, with additional disclosures in March
S-REITs, including Sabana REIT, are externally managed. As such, unitholders DO NOT pay staff costs and directors’ fees. These are born by the sponsor as evidenced by Sabana REIT’s manager’s reply. “It should be highlighted that Director fees and all staff compensation are paid by the Manager and not the REIT,” the manager says.
