Dasin Retail Trust Management issues demand letter to minority directors over breach of duties

They must compensate DRTM for blocking an investment deal by a Chinese state-owned entity, amongst others.

Dasin Retail Trust Management (DRTM) has issued a demand letter to two minority directors of Dasin Retail Trust (DRT) for breaching their duties owed to both entities.

The minority directors, namely Zhang Zhencheng (ZZC) and Zhang Zhongming (ZZM), serve as director and alternate director of DRTM, respectively.

In its letter of demand, DRTM said the minority directors sabotaged and obstructed its attempts to restructure DRT’s debts, amongst others.

According to a bourse filing, the directors blocked a deal for a reputable Chinese state-owned entity to invest in DRT to maintain ZZC's status as the largest unitholder and protect his stake in DRTM.

In response, DRTM has demanded compensation from the minority directors for losses from the failed investment deal, including the potential capital injection, costs of negotiation, and losses from delayed refinancing. 

The directors must also compensate DRTM for the total rental arrears owed under the Xiaolan Master Lease as of 31 March 2023.

DRTM said the directors failed to fake any action to recover significant amounts of rent in arrears owed by Dasin Metro-Mall Merchant Investment Co., Ltd., to DRT’s wholly-owned subsidiary, according to the relevant master lease.

Dasin Metro-Mall Merchant Investment is a wholly owned subsidiary of ZZC, his brother, and ZZM.

Other demands from DRTM, the trustee manager of DRT, are the following:

• Compensate the trustee manager for the losses suffered due to the failure to comply with the DRT’s financial control procedures and policies.
• Cease their continuing attempts to obstruct and frustrate DRT's restructuring efforts.
• Cease their attempts to internalise the management of DRT and indemnify the Trustee-Manager for all costs and expenses that have been incurred in the resisting of the same. 
• Cease their attempts to transfer the trustee manager’s powers to ZZC through having the requisitionists issue the requisition notice to convene a general meeting of unitholders to pass the Second Set of Resolutions. 
• Cease all legal proceedings commenced against the Trustee-Manager and indemnify it for all costs and expenses that have been incurred in resisting the same.