What went wrong with Indiabulls Property Investment Trust?

THE short answer to the question posed in the headline above is "everything". From the time it listed to its impending delisting sometime soon, Indiabulls Property Investment Trust (IPIT) brought nothing but grief to its unitholders, so much so that if Singapore Exchange (SGX) is serious about developing the market here into an attractive global hub for listing of real estate investment trusts (Reits) including business trusts, it should scrutinise the entire chain of events associated with IPIT's eight-year existence on the mainboard with a view to improving its quality control and ensuring that the investing public never suffers such a devastating loss again.

Retail investors too should learn from this sorry episode, that when it comes to investing in instruments exposed to overseas assets, greater care should be taken because risks are likely to be significant.

IPIT was a business trust exposed to India's office and retail shopping sectors that listed in June 2008 at S$1 per unit and was suspended two months ago ahead of a privatisation and delisting. In its tenure as a listed entity on SGX, minority unitholders have had to contend with massive underperformance, starting with a 70 per cent collapse in IPIT's price to S$0.30 just six months after its initial public offering (IPO).