Sabana Reit again rejects EGM requisition over appointment of director

SABANA Shari'ah Compliant Real Estate Investment Trust (Sabana Reit) on Friday said it will not hold an extraordinary general meeting (EGM) for unitholders to endorse the appointment of hedge fund founder Chan Wai Kheong as its independent non-executive director.

This comes in response to a joint requisition letter from Quarz Capital and Black Crane Capital - which together hold more than 10 per cent of the total listed units of Sabana Reit - earlier on Aug 2, calling on Mr Chan to put himself up for endorsement "immediately".

In a statement, the Reit manager said its decision to seek unitholders' endorsement of Mr Chan at the next annual general meeting (AGM) - more than nine months later - is "certainly not with a view to bypass any direction and safeguards as alleged by the requisitionists".

It would be "in the best interest" of unitholders for the manager to be allowed to "focus on improving" the Reit's performance and results, instead of convening an EGM for the sole purpose of seeking unitholders' endorsement of Mr Chan, said the manager.

Sabana Reit had appointed Mr Chan as its independent non-executive director from June 2.

He also serves as a member of the audit committee, and nominating and remuneration committee. His appointment is subject to the endorsement of the Reit's independent unitholders at or before the Reit's AGM.

The manager said it is appropriate to provide Mr Chan or any new independent director with a "reasonable amount" of time to understand in detail matters relating to - among other things - Sabana Reit's business, operations and properties; and to demonstrate his ability to serve as an independent director before his appointment is subject to the vote of unitholders.

This way, unitholders will be in a "better position" to form a view of the director and vote accordingly.

The manager further said it is "puzzled" by Quarz and Black Crane's objections to Mr Chan's suitability as independent director, given that he was one of the nominees proposed by Quarz.

This is not the first time the two firms have objected to Mr Chan's appointment; they had in June sent a requisition letter asking to convene an EGM for the Reit's independent unitholders to vote on Mr Chan's appointment.

Quarz and Black Crane had then also proposed that their own chief investment officers (CIOs), Jan Frederic Moermann and Peter Kennan, respectively, be appointed to the board instead.

Sabana Reit's manager had then rejected convening the requisitioned EGM, as it believed the reasons put forth by the two firms lack grounds.

As part of ongoing efforts to engage with unitholders, the manager noted that it has already increased, and will continue to increase, the frequency of its investor relations activities to provide the latest updates on developments of Sabana Reit, in accordance with the Singapore Exchange's (SGX) regulations.

They include SGX announcements on material updates, dialogue sessions with unitholders and direct engagement with "large" unitholders.

Units of Sabana Reit closed unchanged at 44.5 Singapore cents on Friday.