Dasin Retail Trust unitholders to convene EGM to internalise trustee-manager
Sign up now: Get ST's newsletters delivered to your inbox
Ocean Metro Mall, located in China's Guangdong province, is an asset in Dasin Retail Trust's portfolio.
PHOTO: DASIN RETAIL TRUST
Michelle Zhu
Follow topic:
SINGAPORE – A group of 15 Dasin Retail Trust investors, who collectively hold more than 10 per cent of the units in the business trust, have served a requisition notice to replace its current external trustee-manager, Dasin Retail Trust Management (DRTM), with a newly incorporated internal trustee-manager.
The new entity will be wholly owned by all unitholders of Dasin Retail Trust.
On behalf of this group, unitholder Tao Naiqun on Nov 23 said that the minority investors were seeking to convene an extraordinary general meeting to approve the internalisation “as a matter of urgency”.
This was because the trustee-manager’s major shareholder, Sino-Ocean Capital, remains subject to a creditors’ winding-up petition to be heard on March 27, 2024, in Hong Kong.
The minority investors are worried about who will look after their interests if the Hong Kong court approves the winding-up, Mr Tao said.
He also noted that no progress has been made on the trust’s refinancing front, in a reference to the notices received by the trustee-manager from several lenders who have called defaults under syndicated facilities.
“Disappointed investors have questioned how this came to pass, as Dasin Retail Trust is still recording positive net assets,” Mr Tao said.
He claimed that minority investors were also “disturbed” by the updates on the trustee-manager’s board, in the wake of the Sept 11 announcement of independent director Sun Shu’s resignation, which took effect from Aug 29.
Mr Sun chaired the remuneration committee, and was a member of the audit and risk committee and the nominating committee.
Mr Tao said: “This leaves only three independent directors out of the six remaining directors, in breach of the statutory requirement for the majority of the board to be independent.”
He said DRTM had announced that it would aim to fill the vacancy within two months and, in any case, no later than within three months.
Concerned investors have noted, however, that no independent director has so far been appointed.
Mr Tao also pointed out that DRTM’s lead independent director Tan Huay Lim was facing a lawsuit brought by Mr Zhang Zhencheng, whose family trust owns a major unit holding in Dasin Retail Trust.
“Against the backdrop of Sino-Ocean’s financial woes and the concerns in relation to DRTM’s board, the petitioning investors believe that internalisation would be crucial to preserve Dasin Retail Trust’s asset value. There would be a complete alignment of interests between unitholders and an internal trustee-manager wholly owned by them,” he said.
In Mr Tao’s view, the proposed move would also enhance corporate governance by giving unitholders a say in the composition of the board of the internalised trustee-manager, while making it “easier to move forward with restructuring negotiations” in the “absence of diverging interests”.
Other cost efficiencies brought about by internalisation, such as a reduction in management and trustee fees, could also translate to a higher distribution per unit for unitholders, he added.
The Edge Singapore said that unlike for Sabana Industrial Real Estate Investment Trust,
For one, the internalisation of a trustee-manager of a business trust has been done before in the case of Croesus Retail Trust.
For another, it is easier to internalise a trustee-manager that has already been set up rather than apply for a capital market’s licence with the Monetary Authority of Singapore to set up a new trustee-manager, the publication said.
The only issue could be staffing, it added.
Units of Dasin Retail Trust closed flat at 5.9 cents on Nov 24, with no trades done. THE BUSINESS TIMES
