MAS, police launch probe into EHT current, former directors over disclosures

Singapore

THE Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) of the Singapore Police Force have launched a joint investigation into Eagle Hospitality Trust's (EHT) current and former directors as well as officers responsible for managing the trust.

The probe is in connection with suspected breaches of disclosure requirements under Section 203 of the Securities and Futures Act, MAS and CAD said in a statement on Friday.

They added that the scope of the joint investigation will be widened if the evidence obtained reveals that other offences may have been committed.

The probe stems from a referral by the Singapore bourse operator's regulatory arm, Singapore Exchange Regulation (SGX RegCo).

MAS and SGX RegCo announced on April 20 that they were looking into possible breaches of laws, regulations and listing rules, in relation to the issues surrounding EHT's real estate investment trust, Eagle Hospitality Reit (EH-Reit).

EHT is a stapled trust comprising EH-Reit and Eagle Hospitality Business Trust.

Trading in EHT stapled securities was voluntarily suspended on March 24, after its managers received a demand for the immediate repayment of a US$341 million syndicated loan.

The event of default was triggered by the non-payment of rent by Urban Commons - the US-based hotel trust's sponsor and the master lessee of EH-Reit's properties - to EHT.

Urban Commons also failed to provide the full sum of security deposits due under the master lease agreements to EHT.

The EHT managers announced last week that monies originally intended for the maiden distribution to stapled securityholders will now be redirected to fund critical expenses of the trust and its underlying portfolio.

This is in the light of Urban Commons' "continuing failure" to discharge its obligations under the master lease agreements.

The managers on Wednesday also disclosed that Hong Kong-listed property conglomerate Far East Consortium International (FECIL) has inked a non-binding conditional proposal with Urban Commons, which could see FECIL acquiring a 70 per cent stake in EH-Reit's manager and its trustee-manager.