MAS orders removal of EH-Reit manager after submissions raise 'no new material facts'
Uma Devi
Singapore
THE Monetary Authority of Singapore (MAS) on Monday ordered the removal of the manager of Eagle Hospitality Reit (EH-Reit). MAS has also directed DBS Trustee, in its capacity as trustee of EH-Reit, to appoint a new manager "as soon as practicable".
EH-Reit is part of the hospitality stapled group Eagle Hospitality Trust (EHT). EHT also consists of Eagle Hospitality Business Trust, which is presently dormant.
MAS's latest announcement follows a Notice of Intention (NOI) issued on Oct 26.
MAS had said then that the NOI was in view of multiple breaches of the Securities and Futures Act (SFA) by the Reit's manager EH-Reit Management, as well as "serious concerns" over the manager's ability to comply with rules and regulations.
The NOI gave DBS Trustee and EH-Reit management an opportunity to provide reasons why the manager should not be removed. The duo were given 10 days to respond.
MAS yesterday said it had received written submissions from EH-Reit Management's shareholder Mandarin West Holdings and had "carefully considered" these.
But as the written submissions raised "no new material facts", MAS had proceeded to issue the direction to DBS Trustee.
"MAS continues to have serious concerns with EH-Reit Management's ability and commitment to comply with MAS's rules and regulations, given the numerous breaches of the Securities and Futures Act, including recurrent and ongoing breaches of capital and financial requirements," said MAS.
EH-Reit Management had breached these financial requirements for the first time in the fourth quarter of 2019, but only informed MAS in April this year.
The manager also breached the same base capital requirement on Aug 31 and Sept 30, despite directions for it to rectify breaches and take steps to enhance the monitoring of its financials.
Other breaches include not seeking MAS's approval before providing financial assistance to a subsidiary, late submissions of regulatory returns, and the failure to present to unitholders audited financial statements of EH-Reit within the stipulated timeframe.
MAS added that it will take "stern action" against any financial institution that does not comply with its rules and regulations.
Trading of EHT units was voluntarily suspended on March 24 this year, after the manager defaulted on a loan of US$341 million.
