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THE Singapore High Court has dismissed an appeal by several ESR entities to vote on Sabana Industrial Real Estate Investment Trust’s (Sabana Reit) proposed trust deed amendments.
It also ordered the entities to pay HSBC Institutional Trust Services (Singapore) – the Reit’s trustee – S$16,119.80 in legal costs, with the remaining costs and expenses to be paid out of the trust.
On Friday (Jul 26), the trustee noted that the court will issue reasons for its decision at a later date. It also added that the Reit will proceed with the extraordinary general meeting (EGM) on Aug 6.
In a statement seen by The Business Times, Sabana Growth Internalisation Committee (SGIC), which was set up by unitholders including Quarz Capital, said the ruling “clarifies and strengthens” investor protection in Singapore.
SGIC also urged all unitholders to vote for the resolutions in favour of the internalisation at the EGM.
“The successful internalisation of Sabana Reit will allow all unitholders to own the manager,” said the committee. “It will bring about stronger corporate governance, investor protection, higher distribution per unit (DPU) and the revival of the Singapore Reit market.”
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The committee also asked Sabana’s manager and trustee to protect unitholders’ interest by returning costs and DPU withheld to them.
It also requested the sponsor and the owner of the trust’s current manager to protect jobs, uphold corporate practices, as well as waive non-compete agreements and allow the current staff of the external manager to join the new entity.
ESR’s appeal came after the court in May ruled that the trust deed amendments are required to effect the internalisation of Sabana’s manager, but barred the entities from voting on them.
The court ruling arose from an Order 32 application submitted by the trustee in January to clarify steps for the internalisation process.
In the application, the trustee sought court declarations that proposed amendments to the trust deed are required to implement internalisation. It also sought a declaration on whether ESR entities ought to be permitted to vote on the amendments.
ESR entities were prohibited from voting as the court deemed them to have an interest from fee income the external manager earns.
Units of Sabana Reit were trading flat at S$0.345 as at 10.54 am on Friday.
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