Dasin Retail Trust unitholders to convene EGM to internalise trustee-manager
Michelle Zhu
A GROUP of 15 Dasin Retail Trust investors, who collectively hold over 10 per cent of the units in the business trust, have served a requisition notice to replace its current external trustee-manager, Dasin Retail Trust Management (DRTM), with a newly incorporated internal trustee-manager. The new entity will be wholly owned by all unitholders of Dasin Retail Trust.
On behalf of this group, unitholder Tao Naiqun on Thursday (Nov 23) said that the minority investors were seeking to convene an extraordinary general meeting (EGM) to approve the internalisation “as a matter of urgency”.
This was because the trustee-manager’s major shareholder, Sino-Ocean Capital, remains subject to a creditors’ winding-up petition to be heard on Mar 27, 2024.
The minority investors are worried about who will look after their interests if the Hong Kong court approves the winding-up, he said.
Tao also noted that no progress has been made on the trust’s refinancing front, in a reference to the notices received by the trustee-manager from several lenders who have called defaults under syndicated facilities.
“Disappointed investors have questioned how this came to pass, as Dasin Retail Trust is still recording positive net assets,” he said.
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Tao claimed that minority investors were also “disturbed” by the updates on the trustee-manager’s board, in the wake of the Sep 11 resignation of independent director Sun Shu, effective Aug 29.
Sun chaired the remuneration committee, and was a member of the audit and risk committee and the nominating committee.
“This leaves only three independent directors out of the six remaining directors, in breach of the statutory requirement for the majority of the board to be independent,” noted Tao. He said DRTM had announced that it would aim to fill the vacancy within two months, and in any case, no later than within three months. Concerned investors have noted, however, that no independent director has so far been appointed.
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Tao also pointed out that DRTM’s lead independent director, Tan Huay Lim, was facing a lawsuit brought by Zhang Zhencheng, whose family trust owns a major unitholding in Dasin Retail Trust.
“Against the backdrop of Sino-Ocean’s financial woes and the concerns in relation to DRTM’s board, the petitioning investors believe that internalisation would be crucial to preserve Dasin Retail Trust’s asset value. There would be a complete alignment of interests between unitholders and an internal trustee-manager wholly owned by them,” he said.
In Tao’s view, the proposed move would also enhance corporate governance by giving unitholders a say in the composition of the board of the internalised trustee-manager, while making it “easier to move forward with restructuring negotiations” in the “absence of diverging interests”.
Other cost efficiencies brought about by internalisation, such as a reduction in management and trustee fees, could also translate to a higher distribution per unit for unitholders, he added.
Units of Dasin Retail Trust were unmoved at S$0.059 as at 4.38 pm on Thursday, with no trades done.
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