On Feb 16, based on an announcement by the Monetary Authority of Singapore (MAS), the Securities Industries Council (SIC) has found that Allen & Gledhill (A&G) and DBS Bank “have fallen short of the standards expected of advisers” and both A&G and DBS have “breached” the Singapore Code on Take-overs and Mergers.
However, the Council has decided not to take any further action against A&G and DBS because prompt action was taken by the advisers to mitigate the breaches; and both A&G and DBS have since taken steps to improve their internal processes and controls to prevent a similar incident from re-occurring.
On Dec 31, 2021, MCT’s manager along with Mapletree North Asia Commercial Trust’s (MNACT) manager announced the proposed merger of MCT and MNACT to form Mapletree Pan Asia Commercial Trust N2IU (MPACT). The merger was effected by a trust scheme of arrangement, and was approved by the unitholders of both REITs. The trust scheme was effective on July 21, 2022.
A&G and DBS were the legal and financial advisers respectively to MCT’s manager. On Feb 16 this year, it has emerged that DBS advised MCT’s manager (on Oct 18, 2021) that a whitewash waiver was necessary. Mapletree Investments owned 32.6% of MCT at the time, and 38.1% of MNACT. This may have led to an increase in Mapletree Investments’ unitholding such that it would oblige it to make a general offer for MPACT (the name given to the enlarged MCT). A waiver from the requirement to make a general offer is normally granted in cases where independent shareholders’ approval is obtained.
A&G, at a later date (Nov 24m 2021), advised that a whitewash waiver was not necessary. “DBS did not raise any issue with A&G’s advice. Relying on A&G’s advice, the MCT Manager did not make an application to the Council for a whitewash waiver,” the SIC announcement states.
“The MCT Manager reviewed the transaction and sought to confirm the need for a whitewash waiver with A&G again on 6 January 2022. Having reconsidered the issue, A&G advised that a whitewash waiver was necessary,” the statement says.
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Subsequently, MCT’s manager reviewed the transaction, realised the mistake and submitted an application for the whitewash waiver. Hence the SIC took no further action against MCT’s manager.
The the partner of the A&G team advising MCT and its manager voluntarily abstained from undertaking Code-related work for 12 months from Jan 13, and also stopped advising MCT’s manager on the Trust Scheme.
