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I blur, that' s why I sold some of my holding first. I also don' t like the manager' s reply to SGX' s queries. Especially the part that they don' t know whether they could easily find a buyer should they want to sell the 23 millions property they intended to buy! Wah kau, then why you want to pay 23 millions for it!!??
I support Activist. Sometimes plan too much become NATO. In this case, I don' t think Mr Low is rash. Even if the recall of loan is real in the event the manager is removed, the bank has a duty to ensure all necessary steps are done to extract maximum value of the property in the even of sale. They may not want to recall the loans at all if payment is kept up to date.
Mr Koh can still put in his resolutions. If the requirements are met, the manager has to call fo EGM too for Mr Koh' s resolutions. This is going to get interesting. 2 EGMs by 2 groups of minority unitholders. Meanwhile, I am getting less and less with the respond by the manager. Nothing reassuring or confidence boosting with regard to the strategic review too. No update. I am now tempted to sell the remaining units and vest in other stocks but I will wait a while and see the events unfold.
Why not start approach other REIT manager? They are so many in Sg. Sure they are interested to take up the job.
There is something called blind trust, no laws to support, not regulations etc. MAS will not do anything on this. When I spoke to MAS, they made it very clear to me that this is just a matter of different opinions on how a private corporation should operate and MAS cannot and will not intervene.
ACTIVIST_SPEAKS ( Date: 17-Feb-2017 20:44) Posted:
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We have to trust the expertise of those experts who wrote the Sabana Reit IPO Prospectus.
Do you believe that when they write " MAS directs the Trustee to remove the Manager" , it means MAS wants the Trustee to remove the Manager immediately without a replacement?
kohyeekan ( Date: 17-Feb-2017 15:18) Posted:
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I repost in case people don' t notice this important announcement:
I urge everyone to consider our resolutions, and the rationale behind it. This is not about our emotion (and anger) only. I understand the emotion, I feel angry too! However, we need to have a workable plan, or else we won' t even have enough votes to pass the resolutions and we will get nothing! (You see, no matter how much we hope, not everyone wants to gamble with their huge investment...) This resolutions are a good compromise between what we hope to achieve and what we can realistically achieve! Please email me at [email protected]. I will email you the final version of the resolutions (i am now amending the wordings) and a full description to explain the rationale of the resolutions, tomorrow. Let' s work together to safe-guard our investment!
The resolutions are:
1) Request the Manager to remove Mr. Kevin as the CEO and executive director of the Manager
2) Direct the Manager to hire an internationally reputable agent company to actively divest properties, until the average unit price of the REIT for consecutive 30 trading days is higher than 90% of the NAV per unit.
3) Direct the Trustee to amend the Trust Deed so that:
(a) The Manager must seek approval from the unit holders through an EGM when the accumulative value of the new investments for the financial year is more than 2% of the Deposited Property.
(b) The Manager must seek approval from the unit holders through an EGM for issuance of new units, and for any new loans or financial arrangements that exceeds 2% of the Deposited Property.
(c) Require that at least half of the Board of Directors of the Manager to comprise independent directors appointed by the unit holders of the REIT biannually through the AGM. The Manager and the Sponsor cannot vote in selection of the independent directors.
4) A new fee structure, that is significantly reduced and is pegged to the DPU growths. The total fee received by the Manager for any financial year cannot exceed 10% of the Net Property Income of the financial year
Rationale of our resolutions:
1) Why not just vote out the Manager?
The Manager is a company that we have a long term contract to manage our properties. Without a manager, no one is there to manage our properties and dire situations could ensure. One of the possible consequence is that the banks that lend us money could decide that since the risk is too high, they will just want to recall the loans, especially since that there are currently very few companies in Singapore with a valid REIT license to manage the risks (and almost all the others are already managing their REIT). So, the search for new manager is extremely hard and the longer the process, the higher chance for the banks to recall the loans. This is a risk that I think we the unit holders should not attempt likely.
2) Is it sufficient to just remove the CEO of the Manager company?
Well, we don' t just propose to remove the CEO, we also propose to limit the mandate of the Manager so that they can no longer to funny things - including they cannot make new purchases without the approval of the unit holders, they cannot issue new units and rights, and we want to have more than half of the directors of the Manager company to be appointed by the unit holders. So, basically, the Manager company is no longer like before with the power to do whatever they want. They cannot buy the properties from the Sponsor at high prices, because the directors of the Manager company are mainly appointed by us to protect our rights. This is the ideal situation of ensuring that the situation is orderly, but at the same time, the Manager and the Sponsor can no longer take advantage of the unit holders.
3) Why not directly divest all properties, but a so complicated Resolution #2?
First is that to have a total divestment of all properties, we need to have 75% of votes to win. This is not realistic. Second, a total winding down of the REIT will mean selling the properties at low prices (due to fire sale within the short period of time). My proposed Resolution #2 will solve these problems. The manager needs to keep selling the properties as long as the share price is depressed. If after selling one or two properties, they regain the confidence of the market, they can stop selling and I think most unit holders will be happy to keep the good properties for long term. However, if they fail to regain the confidence, they need to keep selling over a long period of time and we will avoid the fire sale situation.
4) Why we talk about management fee and management structure, isn' t it that we just want to remove the manager?
Removing the manager is never an easy job. We need to start thinking of what if we fail? If we don' t have enough vote, at least we can vote on the new management fee that the Manager and the Sponsor cannot vote. The chance for us to win is a lot higher!
5) If I have signed the resolutions by Mr. Low, can I or should I sign these resolutions again?
First, signing the requisition letter does not mean that you have decided what and how to vote. It only ensure that the resolutions will be voted by an EGM. There is no guarantee that any resolutions will be passed, especially that we probably need 75% of the votes to wind down the REIT. I think the threshold to win the change of the management fee is a lot lower. So, I don' t think there is any conflict of interest here to sign both resolutions.
If you are interested to sign the resolutions, please email me at [email protected]. I will send out more information to those who email me, hopefully on Saturday morning. Let' s do our part to ensure the best for our investment!
I prefer to trust the Sabana Reit Prospectus.
kohyeekan ( Date: 17-Feb-2017 15:18) Posted:
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I have faith in MAS, that they have considered as many possible process scenerio, right from reit ipo up to closure & everything in between. Rulings, trust deed or whatever , available or in-progress will prevail to protect investor. I will take my One-And-Only chance to vote FOR the resolutions
kohyeekan ( Date: 17-Feb-2017 15:07) Posted:
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Fangqq, did you verify with MAS that " to remove hte Manager" should be interpreted as " to replace the Manager" ? I personally asked MAS on this and they told me that at the moment the resolution is passed, the Manager ceases to be the Manager. Please check with MAS to verify your basely assumption.
Sabana Reit IPO Prospectus Page 146
RETIREMENT OR REMOVAL OF THE MANAGER
" the Manager may be removed by notice given in writing by the Trustee if:
.......
the MAS directs the Trustee to remove the Manager&rdquo
To suggest that MAS wants the Manager to be removed immediately without a replacement is really incredible.
The phrase here " to remove the Manager" should means to replace the Manager.
Therefore, all the phrases in the Prospectus " to remove the Manager" should be interpreted as to replace the Manager
kohyeekan ( Date: 17-Feb-2017 14:48) Posted:
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laksaman57, I personally asked MAS on this and they told me that at the moment the resolution is passed, the Manager ceases to be the Manager. Whether it will create chaos, you can decide yourself. I think the chance that it will is quite high and I don' t want to take the risk on my hard-earned money.
I want to safe-guard my hard-earning money. Both removal of the manager without a plan and keeping the current Manager and Sponsor will bring the same results eventually...
Dont know about others but i dont percieve any choatic theory but instead see greater clarity as more and more details are put forth in this thread. Hope others feel the same.
ACTIVIST_SPEAKS ( Date: 17-Feb-2017 14:43) Posted:
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Everyone that I talked to, including MAS, SIAS, a major unit holder with experience with taking over a REIT, someone with experience in management of the properties, warned me that there is a significant risk of bank recalling of the loans. Anyone of the persons that you mentioned here come out to denounce that there is no such risk? I have never read one article by Ms. Anita, Ms. Warden, Ms. Marissa, Mr. Yong etc whom I also talked to, who come out to say that there is no risk of bank recalling the loans. In fact, this is what SIAS warned in its initial statement...
ACTIVIST_SPEAKS ( Date: 17-Feb-2017 14:43) Posted:
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Are you saying that the Trustee can decide for the unit holders what is right for their properties? You see, you are basically saying that your resolution to remove the Manager is not good, and the Trustee should not implement it. The Trustee is bound by laws to implement your resolutions, and this is not what the Trustee has rights to choose to refuse to implement...
Fangqq ( Date: 17-Feb-2017 14:35) Posted:
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Sabana Reit IPO Prospectus Page 161
The Units and Unitholders
" The rights and interests of Unitholders are contained in the Trust Deed. Under the Trust Deed, these rights and interests are safeguarded by the Trustee."
Therefore to safeguard unitholders rights and interests, the Trustee will NOT ask the Manager to leave immediately without a replacement.
I agree that previous resolutions are lawful - the EGM will probably be convened. However, that still does not answer the question what happens next after the removal of the Manager as proposed by previous resolutions. I am in the opinion that the Manager will cease to function once the resolution is passed, according to my understanding of the Trust Deed, see below.
There are questions on what happen when the Manager is voted out. Below is what will happen after the Manager is removed, according to the Trust Deed. At the moment that the Manager is removed, the Manager " as aforesaid ipso facto cease to be the Manager" , meaning that it ceases to the be Manager by the fact that it was removed. According to the Trust Deed, the Trustee " should by writing under its seal appoint some other corporation" to manage the REIT. Unfortunately, right now, very few corporations have the license to operate a REIT and so far, no one expresses interest to help us to operate the REIT. So, yes, at the very moment of the resolution to remove the Manager is passed, no one is there to manage the REIT for us, unless we have a replacement team ready.
In any of the cases aforesaid, the Manager shall upon notice by the Trustee as aforesaid ipso facto cease to be the Manager and the Trustee shall by writing under its seal appoint some other corporation upon and subject to such corporation entering into such deed or deeds as the Trustee may be advised to be necessary or desirable to be entered into by such corporation in order to secure the due performance of its duties as the new manager, which deed shall if so required by the Manager, provide that the words " Sabana" or any abbreviation thereof shall not thereafter form part of the name of the Trust, PROVIDED THAT this provision shall not prejudice the right of the Trustee herein contained to terminate the Trust in accordance with the provisions herein.
In the event that the Manager is removed in accordance with Clause 24.1, the removed Manager shall give the new Manager all books, documents, records and any other property held by or on behalf of the removed Manager relating to the Trust and take all steps within its powers as may be required or necessary to facilitate the change of Manager.
I repost in case people don' t notice this important announcement:
I urge everyone to consider our resolutions, and the rationale behind it. This is not about our emotion (and anger) only. I understand the emotion, I feel angry too! However, we need to have a workable plan, or else we won' t even have enough votes to pass the resolutions and we will get nothing! (You see, no matter how much we hope, not everyone wants to gamble with their huge investment...) This resolutions are a good compromise between what we hope to achieve and what we can realistically achieve! Please email me at [email protected]. I will email you the final version of the resolutions (i am now amending the wordings) and a full description to explain the rationale of the resolutions, tomorrow. Let' s work together to safe-guard our investment!
The resolutions are:
1) Request the Manager to remove Mr. Kevin as the CEO and executive director of the Manager
2) Direct the Manager to hire an internationally reputable agent company to actively divest properties, until the average unit price of the REIT for consecutive 30 trading days is higher than 90% of the NAV per unit.
3) Direct the Trustee to amend the Trust Deed so that:
(a) The Manager must seek approval from the unit holders through an EGM when the accumulative value of the new investments for the financial year is more than 2% of the Deposited Property.
(b) The Manager must seek approval from the unit holders through an EGM for issuance of new units, and for any new loans or financial arrangements that exceeds 2% of the Deposited Property.
(c) Require that at least half of the Board of Directors of the Manager to comprise independent directors appointed by the unit holders of the REIT biannually through the AGM. The Manager and the Sponsor cannot vote in selection of the independent directors.
4) A new fee structure, that is significantly reduced and is pegged to the DPU growths. The total fee received by the Manager for any financial year cannot exceed 10% of the Net Property Income of the financial year
Rationale of our resolutions:
1) Why not just vote out the Manager?
The Manager is a company that we have a long term contract to manage our properties. Without a manager, no one is there to manage our properties and dire situations could ensure. One of the possible consequence is that the banks that lend us money could decide that since the risk is too high, they will just want to recall the loans, especially since that there are currently very few companies in Singapore with a valid REIT license to manage the risks (and almost all the others are already managing their REIT). So, the search for new manager is extremely hard and the longer the process, the higher chance for the banks to recall the loans. This is a risk that I think we the unit holders should not attempt likely.
2) Is it sufficient to just remove the CEO of the Manager company?
Well, we don' t just propose to remove the CEO, we also propose to limit the mandate of the Manager so that they can no longer to funny things - including they cannot make new purchases without the approval of the unit holders, they cannot issue new units and rights, and we want to have more than half of the directors of the Manager company to be appointed by the unit holders. So, basically, the Manager company is no longer like before with the power to do whatever they want. They cannot buy the properties from the Sponsor at high prices, because the directors of the Manager company are mainly appointed by us to protect our rights. This is the ideal situation of ensuring that the situation is orderly, but at the same time, the Manager and the Sponsor can no longer take advantage of the unit holders.
3) Why not directly divest all properties, but a so complicated Resolution #2?
First is that to have a total divestment of all properties, we need to have 75% of votes to win. This is not realistic. Second, a total winding down of the REIT will mean selling the properties at low prices (due to fire sale within the short period of time). My proposed Resolution #2 will solve these problems. The manager needs to keep selling the properties as long as the share price is depressed. If after selling one or two properties, they regain the confidence of the market, they can stop selling and I think most unit holders will be happy to keep the good properties for long term. However, if they fail to regain the confidence, they need to keep selling over a long period of time and we will avoid the fire sale situation.
4) Why we talk about management fee and management structure, isn' t it that we just want to remove the manager?
Removing the manager is never an easy job. We need to start thinking of what if we fail? If we don' t have enough vote, at least we can vote on the new management fee that the Manager and the Sponsor cannot vote. The chance for us to win is a lot higher!
5) If I have signed the resolutions by Mr. Low, can I or should I sign these resolutions again?
First, signing the requisition letter does not mean that you have decided what and how to vote. It only ensure that the resolutions will be voted by an EGM. There is no guarantee that any resolutions will be passed, especially that we probably need 75% of the votes to wind down the REIT. I think the threshold to win the change of the management fee is a lot lower. So, I don' t think there is any conflict of interest here to sign both resolutions.
If you are interested to sign the resolutions, please email me at [email protected]. I will send out more information to those who email me, hopefully on Saturday morning. Let' s do our part to ensure the best for our investment!
Please read my point carefully, instead of just insisting that everything is OK. You hope that the Trustee will purposely delay the service of the notice for you, risking liabity for itself? No way. serving of the notice is just a formality. Once the resolution is passed in an EGM, the Trustee needs to serve the notice to the Manager within a reasonable amount of time. I doubt it will be more than 3 days, if the REIT has not collapse by then..
There are questions what happen when the Manager is voted out. Below is according to the Trust Deed what will happen after the Manager is removed. At the moment that the Manager is removed, the Manager " as aforesaid ipso facto cease to be the Manager" , meaning that it ceases to the be Manager by the fact that it was removed. According to the Trust Deed, the Trustee " should by writing under its seal appoint some other corporation" to manage the REIT. Unfortunately, right now, very few corporations have the license to operate a REIT and so far, no one expresses interest to help us to operate the REIT. So, yes, at the very moment of the resolution to remove the Manager is passed, no one is there to manage the REIT for us, unless we have a replacement team ready.
In any of the cases aforesaid, the Manager shall upon notice by the Trustee as aforesaid ipso facto cease to be the Manager and the Trustee shall by writing under its seal appoint some other corporation upon and subject to such corporation entering into such deed or deeds as the Trustee may be advised to be necessary or desirable to be entered into by such corporation in order to secure the due performance of its duties as the new manager, which deed shall if so required by the Manager, provide that the words " Sabana" or any abbreviation thereof shall not thereafter form part of the name of the Trust, PROVIDED THAT this provision shall not prejudice the right of the Trustee herein contained to terminate the Trust in accordance with the provisions herein.
In the event that the Manager is removed in accordance with Clause 24.1, the removed Manager shall give the new Manager all books, documents, records and any other property held by or on behalf of the removed Manager relating to the Trust and take all steps within its powers as may be required or necessary to facilitate the change of Manager.
Fangqq ( Date: 17-Feb-2017 14:06) Posted:
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Therefore the assertion that the moment we pass the resolution, the Trustee will ask the Manager to leave immediately without a replacement, is really incredible.
Fangqq ( Date: 17-Feb-2017 13:50) Posted:
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Sabana Reit IPO Prospectus Page 146
RETIREMENT OR REMOVAL OF THE MANAGER
" The Manager shall have the power to retire in favour of a corporation recommended by the Manager and approved by the Trustee" means the Manager cannot leave without the approval by the Trustee.
And
" the Manager may be removed by notice given in writing by the Trustee" means the removal of the Manager must be by notice given in writing by the Trustee.