Quarz seeking MAS, SGX RegCo support to ensure Sabana Reit EGM conducted in ‘fair manner’

ACTIVIST investor Quarz Capital, a unitholder of Sabana Industrial Real Estate Investment Trust : M1GU 0% (Sabana Reit), is seeking support from the Monetary Authority of Singapore (MAS) and the Singapore Exchange Regulation (SGX RegCo).

This is to ensure the fair conduct of an upcoming extraordinary general meeting (EGM), where unitholders are expected to vote on the removal of Sabana Reit’s current manager and replace it with an internal one.

The first resolution is for the removal of Reit manager Sabana Real Estate Investment Management (SREIM), while the second concerns the internalisation of the Reit management function of Sabana Reit.

On Tuesday night, activist investor and unitholder Quarz Capital called for MAS and SGX RegCo’s support to “ensure the Sabana external manager respects Singapore’s legal framework”.

Quarz also argued that an increase in the voting hurdle from 50 per cent to 75 per cent, as well as the re-ordering of the EGM resolutions, would “undermine the fundamental pillars of regulatory protection” for unitholders.

This was in response to ESR Group’s proposal that the ordinary resolution concerning the internalisation be tabled as an extraordinary resolution instead, as it effectively amounts to an amendment to the trust deed. ESR is the sponsor of Sabana Reit and the owner of SREIM.

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ESR Group also said the resolution for internalising the manager should be voted on first, before unitholders vote on the resolution to remove the current manager. It feels that the current order of resolutions risks Sabana Reit being left without a manager if the removal resolution passes, but the internalisation resolution does not.

Sabana Reit units closed flat at S$0.43 on Tuesday, before the announcement.