Sabana Reit unitholders vote against appointment of director Chan Wai Kheong at AGM

UNITHOLDERS of Sabana Industrial Real Estate Investment Trust (Sabana Reit) have voted not to endorse the appointment of independent non-executive director Chan Wai Kheong.

Chan, a hedge fund founder and former Credit Suisse trader, was appointed to the board of Sabana Reit in June last year.

At an annual general meeting (AGM) on Apr 26, unitholders representing some 77 per cent of votes cast voted against Resolution 3 to endorse his appointment as a director of the Reit manager.

Unitholders holding a total of 355.6 million units had voted in the resolution.

Unitholders holding another 270.7 million units, including Sabana Reit's major unitholder ESR Cayman and its concert parties, had abstained from voting in that resolution.

The manager of Sabana Reit said it accepted unitholders' decision on Chan.

"Having served on the Board for almost 11 months, Mr Chan has brought great value and insights to the board and management with his experience in the financial sector and as a Sabana unitholder. We are grateful for his contribution and commitment," the Reit manager said.

"In addition to the votes received, it is worth noting that of the total 1,134 valid proxy forms received, about 82 per cent voted for and the remaining 18 per cent voted against Resolution 3," it added.

Activist fund manager Quarz Capital Management, which had led a vocal objection to the appointment of Chan as a director of Sabana Reit, noted that this is the first time in history of Singapore-listed real estate investment trusts (S-Reits) that unitholders successfully voted against the endorsement of a director.

In 2020, Quarz had also been instrumental in the scuppered merger between Sabana Reit and ESR-Reit – which had made S-Reit history as the first time a proposed merger had been voted down by unitholders.

In the latest episode, Quarz – Sabana Reit’s second-largest unitholder with a nearly 12 per cent stake – had called on more than one occasion for an extraordinary general meeting (EGM) to be convened to vote on Chan’s appointment.

The requests had been dismissed by Sabana Reit’s manager as they were deemed to have lacked grounds.

“It cannot be clearer that independent unitholders have no confidence in the decision … to appoint Chan,” Quarz said. “Unitholders expect the endorsement of any future independent director to be done promptly at an EGM instead of a nearly 1-year wait where important decisions and confidential information can potentially be leaked and made at the potential expense of Sabana unitholders.”

In a separate bourse filing, Sabana Reit announced that Chan is stepping down from the board effective immediately.

Sabana Reit will be left with 2 board members – independent non-executive directors Tan Cheong Hin and Wong Heng Tew. Tan also serves as chairman of the board.

Pursuant to SGX listing rules, Sabana Reit said it shall endeavor to find a replacement for Chan within 2 months – and not more than 3 months – from the effective date of cessation.