PROPERTY company ESR Group and activist investor Quarz Capital are facing off in court over alleged defamatory statements made during the latter&rsquo s push to internalise the management function of Sabana Industrial Real Estate Investment Trust (Sabana Reit).

 

The case is currently ongoing before the Supreme Court, with the next case conference scheduled for Dec 5. The case was lodged by claimants E-Shang Infinity Cayman and ESR Group &ndash which is the sponsor of Sabana Reit &ndash on Jul 31.

 

The defendants are Quarz Capital Asia (Singapore), Quarz Capital Management as well as three Quarz employees &ndash head of research Havard Chi, chief investment officer Jan Moermann, and general manager Klaus Wille.

 

Earlier this year, ESR Group and Quarz were embroiled in a public battle over the internalisation of the Reit management function of Sabana Reit, with both parties issuing multiple statements that touched on the merits and risks of internalisation.

 

In June, Quarz requisitioned for an extraordinary general meeting (EGM) to pass two resolutions relating to the internalisation. It said that this would bring benefits to unitholders by providing cost savings once the external manager is removed. Its letter also highlighted its concerns over matters of corporate governance.

 

The claimants have alleged that words or statements published in the lead-up to the EGM have brought ESR Group&rsquo s name into disrepute and lowered its standing in the eyes of the public, and are therefore defamatory.

 

It added that the defendants had &ldquo falsely and maliciously&rdquo published statements in relation to Sabana Reit in an attempt to garner unitholder votes at the EGM.

 

The claimants are claiming, among other things, general damages and exemplary damages to be assessed, as well as an injunction restraining the defendants from publishing defamatory or false statements that refer to the claimants.

 

In a statement to The Business Times, Quarz said that it is &ldquo strongly resisting&rdquo the defamation suit. Its lawyers, Providence Law, added that the defendants have denied the allegations and will be &ldquo vigorously resisting&rdquo the suit in court, relying on defences of fair comment and qualified privilege, among others.

 

Quarz added that it rejects the &ldquo absurd allegations of conspiracy and malice&rdquo made in the suit by ESR, as well as claims that it was attempting to take over the management of Sabana Reit.

 

In the statement of claims, the claimants alleged that they were a victim of a conspiracy perpetrated by Quarz and another shareholder in an attempt to remove the manager and/or take over the management function of Sabana Reit.

 

&ldquo We have always advocated for the internalisation of the Reit manager precisely so that the Reit can be managed by all unitholders &ndash not just us,&rdquo Quarz said.

 

ESR Group previously filed a court application in July to prevent Quarz Capital from convening the EGM for the internalisation of Sabana Reit. The court later dismissed the application to have Quarz&rsquo s requisition rendered &ldquo invalid and/or ineffectual&rdquo .

 

On Aug 7, unitholders of Sabana Reit voted in favour of internalisation, with both resolutions carried. The Reit&rsquo s trustee is in the process of setting up the new internal manager.

 

ESR-Logos Real Estate Investment Trust&rsquo s (Reit) high-specifications industrial building at 7002 Ang Mo Kio Avenue 5 has secured an occupancy of about 50 per cent, upon achieving its temporary occupation permit.

 

This follows the completion of the property&rsquo s asset enhancement initiative, which involved its development into a multi-tenanted high-specifications building with a gross floor area of 25,000 square metres.

 

The space is suitable for advanced manufacturing, info communications and data centre tenants, said the Reit manager on Thursday (Oct 5).

 

It said occupants of the building comprise a &ldquo technology-driven provider of global multimodal specialised logistics solutions serving the electronics industry&rdquo .

 

There is also a listed wellness and healthcare company that carries out research and development activities and manufactures its own range of beauty, health and wellness products.

 

Commenting on the property&rsquo s enhancement, Adrian Chui, chief executive of the manager, said: &ldquo As the pace of economic structural trends such as digitalisation, increasing prevalence of automation and technology and supply chain diversification continue to advance, we will proactively evaluate our rejuvenation initiatives on our properties to cater to the evolving needs of modern industrialists.&rdquo