THE trustee of Sabana Industrial Real Estate Investment Trust : M1GU 0% (Reit) has reiterated that it would not be beneficial at this juncture to convene an extraordinary general meeting and consider resolutions requisitioned by a group of unitholders.

This is because “substantial work” has already been done on the internalisation of the Reit’s management function.

The trustee also intends to convene an extraordinary general meeting when all material workstreams for internalisation are ready for unitholders’ consideration “in a holistic manner”, it said.

This comes after the requisitioning group of unitholders, who call themselves the Sabana Growth Internalisation Committee (SGIC), had requested on Feb 7 to withdraw and/or modify some of the resolutions they had initially proposed in the requisition notice for the EGM.

Sabana Reit’s manager on Tuesday (Feb 20) disclosed a statement from the trustee outlining its view on the amended resolutions.

In the statement, the trustee, HSBC Institutional Trust Services, said it had repeatedly explained its concerns in relation to the requisitioned resolutions.

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It had invited SGIC to provide material information and explain to unitholders to facilitate their decision-making at the proposed EGM, and also asked SGIC to amend and/or withdraw certain requisitioned resolutions.

The trustee said in the statement: “While the trustee notes and appreciates that the requisitionists have taken some steps to address the above, many of the trustee’s concerns remain unaddressed.”

Taking into account the proposed amendments and withdrawals, the trustee said that certain resolutions are confusing and inconsistent with unitholders’ resolutions passed at the Aug 7 EGM, where unitholders voted to internalise the management function of Sabana Reit.

It also said some resolutions are “not actionable or without clear basis”, and will present challenges and uncertainty in implementation if passed.

Certain requisitioned resolutions may also place Sabana Reit in breach of legal considerations, or are “premature, unnecessary, or likely to incur delay and further costs in internalisation”, said the trustee.

HSBC Institutional Trust Services added that “considerable time and resources” have already gone into resolving ambiguities in and disagreements over the scope and effect of certain resolutions passed at the Aug 7 EGM.

These include requiring a court application on the issue of amendments required to the trust deed constituting Sabana Reit to effect the internalistion.

The trustee believes that if the resolutions are passed, their overall effect may necessitate the trustee having to “consider appropriate next steps”, if it is unable to implement the requisitioned resolutions or if its work on the implementation cannot be discharged within its duties or legal confines.

The trustee urged unitholders to consider whether it would be in their interests for “ambiguities and uncertainties surrounding the internalisation to be repeated or exacerbated by yet another set of requisitioned resolutions”.

“Distractions are counter-productive and only serve to undermine the trustee’s efforts and progress,” said the trustee.

The Feb 20 statement is the latest in developments surrounding the issue of internalising Sabana Reit’s management function.

Two letters – one from the trustee dated Feb 14 and the another from SGIC dated Feb 16 – were also disclosed in a bourse filing on Tuesday.

After SGIC withdrew and/or modified some of its proposed resolutions, HSBC Institutional Trust Services on Feb 14 sought clarification from SGIC on the requisitioned resolutions.

SGIC, led by activist investor Quarz Capital, had responded in its own letter on Feb 16 that it was “deeply dissatisfied” with the trustee’s “lack of clarity and progress” on the internalisation, despite spending S$3.2 million of the unitholders’ money on the process.

“This EGM will help provide clarity and direction to the trustee as to the intentions of the unitholders. This will in turn result in time and cost savings for the unitholders by way of minimising the issues and need for further EGMs,” SGIC said.

The manager of Sabana Reit said it is considering the contents of the two letters and seeking legal advice.

Sabana Reit’s units ended flat at S$0.37, before the statement and letters were disclosed.