Tue, Nov 10, 2020 – 3:00 PM
FUND managers Quarz Capital and Black Crane Capital, in a letter sent on Tuesday and seen by The Business Times, have made a requisition to the board of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust’s (Sabana Reit) manager to convene an extraordinary general meeting (EGM).
Quarz and Black Crane advise entities that collectively hold more than 11 per cent of Sabana Reit. The two fund managers are against the proposed merger of Sabana Reit and ESR-Reit at the current terms of 0.94 ESR-Reit unit for one Sabana Reit.
In the letter, Quarz and Black Crane have proposed five resolutions for investors to vote upon.
The first relates to Ng Shin Ein, who is currently an independent non-executive director of the manager.
Among other things, they are seeking clarification on declarations or disclosures made by Ms Ng during the course of the board’s assessment that Ms Ng should be deemed independent. They have asked unitholders to decide whether the board should be made to disclose other information, including Ms Ng’s business relationships with ESR Cayman and its affiliates.
The second resolution pertains to the hiring of three former ESR employees at Sabana Reit’s manager. Black Crane and Quarz have asked that the board be directed to disclose the circumstances of these hirings, and whether or not potential conflicts of interest were considered.
Third, the fund manager requested that the basis and reasons for recommending the proposed merger be made known – along with the relevant board meeting minutes.
The fourth resolution is for the board to make “further study and investigations of the merits of the proposed merger” in light of the issues raised by independent unitholders in their open letters to the manager and the Reit, and to disclose to unitholders the steps the board has taken as well as the results of the further studies. If appropriate, the board should suspend all actions relating to the proposed merger with a view to terminate it.
Finally, the board has been asked distribute 50 per cent of the previously withheld distribution amount for the first half of 2020 as well as the distributable income from July to September.