Sabana Shari'ah REIT

[ACTIVIST SPEAKS]

“The trust manager agrees to buy assets at highly inflated prices, and the vendor agrees to lease back the asset, also at inflated rents which are well above market rates……….In such a situation, the losers are the unit holders. In substance, they would be sitting on a capital loss right from the start, as the purchase price consideration far exceeds the fair market or replacement value of the asset. They would also be unwittingly saddled with a much larger credit risk than appropriate.” ..... Mdm Ho Ching, at Dinner, Mapletree Logistic Trust, 2005.

We did not know or were too stupid not to heed Mdm Ho Ching’s warning then. But Kevin Xayaraj, the CEO, knew about her 2005 speech and maybe he was there at the dinner. Mr Steven Lim Kok Hoong and Mr Yong Kok Hoon, the two chartered accountants and also independent directors must have also read her speech. The other two directors, Mr Henry Chua, the sponsor representative and Ms Ng Shin Ein, a lawyer, definitely knew the content of Mdm Ho’s speech.

The entire board of directors, knowing that the unitholders would be sitting on a capital loss right after the REIT bought Eunos 3, Eunos 7 and Changi South properties, did nothing to stop the purchase. In fact, they went on to ask the unitholders for monies to buy with the knowledge that immediately after they signed on the dotted line to buy, we will lose.
Are we that stupid to let them continue running our Sabana REIT?