SINGAPORE – Sabana Industrial Real Estate Investment Trust (Sabana Reit) will not be convening an extraordinary general meeting (EGM), its manager announced on Jan 8.

The EGM was requisitioned by the Sabana Growth Internalisation Committee (SGIC) – led by activist investor Quarz Capital – in a letter dated Dec 21, 2023, with 12 resolutions tabled to direct the trustee on the internalisation of the Reit manager.

The manager noted that it has not been able to verify “Sabana Growth Internalisation Committee” as a unit holder, adding that it does not have records of the notice being deposited at its registered office.

Thus, the requisition notice does not comply with the requirements of the trust deed constituting Sabana Reit and the Companies Act 1967, the manager said.

However, it said that it would consider any requisition notice that is properly submitted – which, among others, is duly signed by the relevant unit holder and deposited at the manager’s registered office – in accordance with the applicable laws, listing rules, regulations and/or guidelines.

“The manager has also informed the Sabana Growth Internalisation Committee of the above,” it added.

Quarz has been in an ongoing battle with Sabana Reit’s sponsor ESR Group over the internalisation of the Reit’s management.

In June 2023, Quarz requisitioned an EGM to pass two resolutions relating to the internalisation.

It said that the cost savings to be reaped from the removal of the external manager would benefit unit holders. It has also highlighted its concerns over matters of corporate governance.

However, Sabana’s manager, trustee HSBC Institutional Trust Services and ESR Group, had warned that the process was not so straightforward, as there were risks and uncertainty for unit holders.

The trustee also noted that the process would take a considerable amount of time – at least 12 months – and costs would be incurred for the internalisation.

Proxy advisors also recommended that unit holders vote against the resolution for internalisation, in view of uncertainties and potential adverse consequences.

Nevertheless, Quarz had said in July that there are strong legal and regulatory frameworks in Singapore to safeguard unit holders during the process of setting up an internal manager. It also said in the following month that the trustee should take no more than three to four months to do the preparatory work required to set up the internal manager.

On Aug 7, unit holders of Sabana Reit voted in favour of internalisation, and both resolutions were carried.

On Nov 7, the Reit’s trustee said that certain amendments to Sabana Reit’s trust deed were necessary to effect the internalisation, and that such amendments are subject to an extraordinary resolution of unit holders.

Quarz and other unit holders then formed the SGIC and sent an open letter in December to the regulatory authorities to seek guidance on the internalisation of the Reit’s manager.

Units of Sabana Reit closed flat at 40 cents on Jan 9. THE BUSINESS TIMES