Sabana Reit’s trustee hits back at suggestions of ‘wrongdoing or delay’ in internalisation process
Tessa Oh
THE trustee of Sabana Industrial Real Estate Investment Trust (Sabana Reit) said that it rejects activist investors’ suggestions that it has committed wrongdoing or caused any delay in the Reit’s internalisation.
In a statement filed to the bourse on Tuesday (Jan 30) night, the trustee – HSBC Institutional Trust Services – said it has been focused on executing the unitholders’ mandate by ensuring that its implementation is “orderly, well-considered and advised, in the best interest of all unitholders”.
While the trustee understands that the group of requisitioning unitholders are focused on progress, it reiterated “the importance of avoiding a case of ‘more haste, less speed’, which could be detrimental to the interests of Sabana Reit and its unitholders, if the internalisation – being an unprecedented and complex process – is effected without proper regard to compliance with applicable regulations, policy and/or the provisions of the trust deed”.
The trustee was responding to a letter it received from the requisitioning unitholders on Jan 29. The unitholders, who call themselves the Sabana Growth Internalisation Committee (SGIC), are led by activist investor Quarz Capital.
Last June, Quarz Capital requisitioned an extraordinary general meeting (EGM) to pass two resolutions: to remove Sabana Reit’s manager, and to direct the trustee to internalise the Reit’s management function.
The unitholders voted in favour of the resolutions last August, and the trustee has been working on steps to implement the resolutions.
In December, SGIC sought to convene another EGM to pass 12 more resolutions to direct the trustee on the internalisation of the Reit manager. But Sabana Reit’s manager said it would not convene the EGM as the requisition notice does not comply with the requirements of the trust deed.
In its letter to the trustee, SGIC said, among other things, that it should be allowed to hold the requisition EGM as part of the internal democratic process of the Reit.
Responding to this, the trustee said in its Tuesday statement that it would not be beneficial to the progress of the internalisation for the resolutions, as currently worded, to be tabled to unhitholders at this juncture.
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“The trustee is concerned that more confusion, costs, delay and distraction will arise from the requisitioned resolutions than actual clarity and progress,” it said.
This is why it issued a letter to SGIC on Jan 24 to better understand the resolutions, and invite them to reconsider the need to convene the EGM.
The trustee also noted that SGIC has not yet sufficiently addressed its concerns as to the implementation of the requisitioned resolutions.
Sabana Reit closed S$0.01 or 2.30 per cent lower at S$0.37 on Tuesday before the announcement.
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