Time to revisit headcount test for scheme meetings: observers

Singapore

THE use of a headcount test in scheme meetings - a matter of contention during the recent attempted merger of Sabana Shari'ah Compliant Real Estate Investment Trust (Sabana Reit) and ESR-Reit - should be reviewed, some market players said. There is precedent for its abolishment in Hong Kong, and the rule continues to be debated in other jurisdictions.

At present, Singapore's regulatory regime requires that a scheme of arrangement must cross two thresholds. It must be approved by creditors or shareholders representing three-fourths in value of those voting at a scheme meeting. And it must also be approved by a simple majority, in number, of the scheme company's creditors or shareholders present or voting at the meeting - the so-called headcount test.