ACTIVIST investor Quarz Capital has reached a resolution with ESR after the property company initiated court proceedings over alleged defamatory statements made during Quarz’s push to internalise the management function of Sabana Industrial Real Estate Investment Trust (Sabana Reit).
In a statement on Friday (Apr 5), Quarz said the resolution was “amicable”, and entered into “without any admission of liability on the part of either party”.
Nevertheless, Quarz attached another statement pointing out that its public letter dated Jul 19 was erroneous in mentioning that the removal of the external Sabana manager will result in cost savings to Sabana Reit of about S$7.25 million of fees. It was “incorrect and an error”, Quarz now said.
Quarz also clarified that its statements about “scare tactics” being used against unitholders of Sabana Reit were not references to ESR.
It highlighted as well that its statements about a potential conflict of interest should not be understood to mean that ESR had intended to act or were acting in actual or potential conflict of interest.
Quarz also said the alleged defamatory statements were “not intended to defame or publish falsehoods” relating to ESR. And because it harbours “no malice” against ESR, it will “as a gesture of goodwill” take down all publications from sources within its reasonable control, it added.
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With the resolution achieved, Quarz said it will now focus fully on ensuring that internalisation can be completed as soon as possible, so that all unitholders can start benefiting from the potential dividend per unit and unit price growth as soon as possible.
In so doing, it said it intends to support Sabana unitholders, the trustee – HSBC Institutional Trust Services (Singapore) – and the Sabana Growth Internalisation Committee, which was set up by unitholders, including Quarz, to direct the trustee on the internalisation process.
Last week, unitholders requisitioned an extraordinary general meeting (EGM) to table a set of seven resolutions in its upcoming April 2024 annual general meeting (AGM), or alternatively hold an EGM immediately after the AGM at the same venue.
These unitholders – who include Quarz’s chief investment officer Jan Frederic Moermann and the activist investor’s head of research, Havard Chi – collectively own over 10 per cent of Sabana Reit.
Among the seven resolutions, the requisitioners are requesting for HSBC Institutional Trust Services to be directed to consult with, and seek regulatory waivers or directions from regulatory authorities such that the trustee may provide written certification for new proposed amendments to the trust deed.
Other resolutions sought to prevent the trustee from incorporating any amendment to the trust deed relating to external borrowings, or the establishment or acquisition of subsidiaries held by the manager, unless it provides written certification for the proposed amendments.
On Friday, Quarz urged unitholders to vote for all the resolutions at the EGM “to provide clear directions to the trustee”, and “ensure it can successfully execute on internalisation with as few obstacles as possible”.
“We are fully focused on increasing shareholder value and corporate governance,” Quarz added.
Units of Sabana Reit closed unchanged at S$0.36 on Friday before the announcement.
