Sabana Reit unitholders told requisitionists to respect trust deed rules

Amongst the points stressed by the unitholders was the importance of a supermajority when amending the trust deed.

Some Sabana Industrial Real Estate Investment Trust (REIT) unitholders are concerned about parties who are requisitioning a third extraordinary general meeting.

Based on a regulatory filing on 11 April, the letter came from Chan Wai Kheong, and five other unitholders, whose names were redacted. They told requisitionists -- namely Quarz Capital and four other unitholders -- to respect the rules stated under the trust deed, specifically when it comes to amending it.

Chan also noted that Sabana REIT’s trustee HSBC Institutional Trust Services has filed an application seeking the court’s guidance. Thus, requisitionists should respect the process “so these issues can be heard and decided in an orderly manner.”

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It was in June 2023 when Quarz requisitioned an EGM, which approved the removal of the existing manager of Sabana REIT and the internalisation of the REIT management.

Specifically on internalisation, Chan noted statements from Quarz, saying that the resolution was to “[direct] the Sabana Trustee to consider and take additional steps and propose amendments to the Trust Deeds.” He also said that Sabana Trustee expects two or more EGM to approve the amendments if the internalisation resolution was passed.

“As an individual  investor, when I invest in any REIT, I look for the Trust Deed to set out the structure of our investment vehicle and to regulate who can make investments for the REIT and what the REIT can invest in,” Chan said.

He emphasised that the structure and setup of the external manager are clearly stated. Furthermore, any possible changes in the trust deed must be approved by an extraordinary resolution, requiring the support of 75% or more of the unitholders present and voting, he added. 

Chan said “unitholders can only do what the trust deed allows them to do.” He added that the “trust deed should reign supreme and be amended only with the support of a supermajority.”

He also noted that when the internalisation was approved in August 2023, unitholders had no other details on the amendments, but they were reassured that any changes would be subject to their further approval.

“The Sabana Trustee is seeking to act properly… in wanting to put forward trust deed amendments for the unitholders to consider and approve but a few unitholders are trying to prevent this democratic process,” Chan said.