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17-02-2017, 11:36 AM
IMO, for as long as Reits are externally managed in Singapore – meaning RM company is NOT 100% owned by the Trust and its unitholders – the inherent principal/agent conflict of interests would always exist between RM (agent) and the unitholders of the REIT (principal), for transactions involving paying fees by the trust to the RM.
COI exists in transactions involving purchase of properties BOTH from the Sponsor AND from third parties non-related to the sponsor as well.
Otherwise, what’s the point for “ACTIVIST SPEAKS” to include in his letter, cases of property purchases from non-Sponsor related third parties.
IMO, "To provide objective judgment on whether transactions proposed for the REIT are in the interests of unitholders" is a general requirement expected from all directors of RM (not only ID). It covers all transactions regardless of whether they are properties purchases from sponsor or from third parties non-related to the sponsor.
“To impose a statutory duty on a REIT manager and on its individual directors to prioritize the interests of unitholders over those of the REIT manager and its shareholders, in the event of a conflict of interest” is a more specific requirement.
The two statements are not contradictory to each other – both are drafted with the intent to safeguard unitholders interests.
“Option 1: At least half the Board to comprise independent directors, if unitholders of the REIT are not given the right to appoint the directors of the REIT manager. If unitholders are given such right, the current requirement that the Board is to be at least one-third independent will continue to apply to that REIT manager”.
Like the previous two statements, the intent of “option 1” is also to "protect the interests of unitholders of the REIT” and “not to protect the shareholders’ interests in the RM” has been intentionally added to highlight/contrast the intent of MAS to put clients interests above that of shareholders interests.
The “same treatment” applies to shareholders of TM (Trust Manager) to Business Trust (BT) as well.
RM and TM are specially purpose companies approved by MAS, to manage assets on behalf of Reit and BT respectively. Thus far, there are not allowed to serve more than one client. These are not “ordinary companies” and shouldn’t be treated as such.
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COI exists in transactions involving purchase of properties BOTH from the Sponsor AND from third parties non-related to the sponsor as well.
Otherwise, what’s the point for “ACTIVIST SPEAKS” to include in his letter, cases of property purchases from non-Sponsor related third parties.
IMO, "To provide objective judgment on whether transactions proposed for the REIT are in the interests of unitholders" is a general requirement expected from all directors of RM (not only ID). It covers all transactions regardless of whether they are properties purchases from sponsor or from third parties non-related to the sponsor.
“To impose a statutory duty on a REIT manager and on its individual directors to prioritize the interests of unitholders over those of the REIT manager and its shareholders, in the event of a conflict of interest” is a more specific requirement.
The two statements are not contradictory to each other – both are drafted with the intent to safeguard unitholders interests.
“Option 1: At least half the Board to comprise independent directors, if unitholders of the REIT are not given the right to appoint the directors of the REIT manager. If unitholders are given such right, the current requirement that the Board is to be at least one-third independent will continue to apply to that REIT manager”.
Like the previous two statements, the intent of “option 1” is also to "protect the interests of unitholders of the REIT” and “not to protect the shareholders’ interests in the RM” has been intentionally added to highlight/contrast the intent of MAS to put clients interests above that of shareholders interests.
The “same treatment” applies to shareholders of TM (Trust Manager) to Business Trust (BT) as well.
RM and TM are specially purpose companies approved by MAS, to manage assets on behalf of Reit and BT respectively. Thus far, there are not allowed to serve more than one client. These are not “ordinary companies” and shouldn’t be treated as such.
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Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.