A COMMITTEE led by activist investor Quarz Capital is requisitioning another extraordinary general meeting (EGM) at Sabana Industrial Real Estate Investment Trust : M1GU 0% (Sabana Reit), with 12 resolutions tabled to direct the trustee on the internalisation of the Reit manager.

In a letter dated Thursday (Dec 21), the Sabana Growth Internalisation Committee (SGIC) said unitholders are “highly dissatisfied and concerned about the trustee’s lack of progress on the internalisation, which was voted in almost five months ago”.

It added that it “completely disagree with the trustee’s interpretation of the trust deed, which potentially jeopardises the internalisation process”.

The resolutions tabled include setting out a timeline for the trustee – HSBC Institutional Trust Services – to consider and adopt. It also wants the trustee to provide written updates on the internalisation process every two weeks.

In addition, SGIC is also suggesting a maximum price of S$10 million to acquire the existing external manager within one month of the EGM, and seeks to notify the trustee that “unitholders reject any proposal to acquire the existing Reit manager directly or indirectly for a maximum all-in offer price exceeding S$10 million”.

SGIC also wants the trustee to form a committee comprising at least five individuals to oversee the internalisation process, of which at least two should be proposed by SGIC.

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In June, Quarz requisitioned an EGM to pass two resolutions relating to the internalisation. It said that the cost savings to be reaped from the removal of the external manager would benefit unitholders. Its letter also highlighted its concerns over matters of corporate governance.

However, Sabana’s manager, the trustee and sponsor ESR Group, had warned that the process was not so straightforward, as there were risks and uncertainty for unitholders.

The trustee also noted that the process would take a considerable amount of time – at least 12 months – and costs would be incurred for the internalisation.

In a draft letter to unitholders in July, ahead of the August EGM requisitioned by Quarz, the trustee had also raised the need for another EGM and extraordinary resolution to amend the trust deed.

On Aug 7, unitholders of Sabana Reit voted in favour of internalisation, and both resolutions were carried.

The trustee, on Nov 7, provided an update, which reiterated that certain amendments to the trust deed are necessary to effect internalisation and such amendments are subject to an extraordinary resolution of unitholders.

SGIC, however, came out earlier this month stating its disagreement.

It sent an open letter to regulatory authorities seeking guidance on the internalisation of the Reit’s manager.

The Business Times has reached out to the trustee for comment.