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I suppose MAS and CAD will look into this matter seriously to uncover any wrong doing (if there is) and do the necessary action to protect all shareholders and general market confidence.
The REITs market cannot be tarnished by some black horses who profited for their own gains only!
Time to discover the truth!
Those found to have involved in any wrong doing...should be punished real hard !
Valuation is just an opinion, based on past trends and data. It gives an opinion on what is likely to happen but it is not a fact. Hence the actual rent can be higher or lower than valuation, but if you take sufficient samples, the average of all samples should be within the valuation ranges.
Authorities do not interfere with business operations. If you think MAS is bound by " law" to interfere, you can write to MAS to request their confirmation on their legal obligation under the " law" , as interpreted by you. Otherwise it is just your opinion.
The valuation houses deem industrial rental at $1.80 to $2.10 is reasonable. This is an opinion that is fundamentally difficult to challenge legally. Opinion can be optimistic or pessimistic. But neither is wrong or right, it' s just an opinion.
The reason for the departure have been stated in SGX by the Reit manager and the departed director did not raise any questions regarding the response. Nothing much SGX or MAS can do about it based on just that response which is real and valid. Like SGX or MAS cannot interfere in private Reits operation, the director of a reit manager also cannot compel shareholders of the manager to sell their controlling stake to potential investor. There is no smoking gun. A difference in opinion or financial engineering is not fraud.
Unless someone find evidence of collusion, it will be difficult to prove legal wrongdoing. It can just be attributable to difference in opinions on industrial rental rate going forward. If the whole board speak with one voice, who can say this is not just the board been overly optimistic.
SGX will also not find a new manager for the Reits. They do not own the Reits and have neither obligation nor ownership rights to do so. What they can do is perhaps to suspend trading of the Reits only. This is what happen earlier to a lot of china related stocks.
Not thinking in unitholder' s interest is morally wrong, not legally wrong. I doubt the authorities will do anything unless there are explicit violation against the law. SGX have also not rmake eference to any section of an explicit law the manager may have violated.
Penalise the lousy manager who don't think in the interest of the shareholders!!!
Hmm,... in the interest of the investing public, I would expect that some penalty be imposed on to the relevant parites,... it should not be just to change the REIT manager only,...
If wrong doing is uncovered, good chance sgx can direct trustee to find new mgr to manage the reit 👍
that ' s why a very good question was put up to the REIT manager .. the same property can be sold outside for $23 million or higher also ?
All 3 valuation house will have cover their own arse. Even if they use inputs provided by the sponsor and/or REITs manager, they can say provided values within expected range for similar type of properties. The Saville report stated that. The 3 valuation houses are very established and they know how to cover themselves.
Sabana REIT unitholder has lodged a complaint to the white-collar crime department of the Singapore police against the property valuation houses of Colliers, Savills and Knight Frank
Colliers, Savills and Knight Frank separately and independently did a valuation on the Changi South property using the Capitalization Approach and Discounted Cash Flow Analysis (DCF).
All three concluded that the property was worth exactly $23 million, which is also the price at which Vibrant will sell the asset to Sabana REIT.
Jerry Low Chin Yee, the unitholder of Sabana REIT who complained to the CAD, is questioning how Colliers, Savills and Knight Frank could have arrived at exactly the same valuation for the property. &ldquo In order for all three to come up with the exact valuation figure, they must have used the same future rental income, same assumed discount rate, same forecasted 30 years rent renewal payable and the same estimated terminal value etc," he says in his complaint to the CAD, a copy of which The Edge Markets has seen.
Colliers, Savills and Knight Frank all agree that the Changi South property is worth exactly $23m. I can only hypothesize that they were given the same exact figures to value the property,alleges Low.
If this is true, it begs the question of objectivity and independence of these and past valuation reports, says Low.
It will be worst if all of them (including the vendor and the manager of Sabana REIT) actually conspire to come up with the exact $23m figure so that the property can be &ldquo properly&rdquo sold to the REIT at $23m in accordance to the code of collective investment scheme pertaining to Related Party Transaction,adds Low.
Low says he does not have any evidence of wrongdoing but believes the matter warrants scrutiny &ldquo purely on the fact that for all three valuation houses to separately and independently come to a valuation of exactly $23m for a property with so many variables, is too much of a coincidence unless they are using the same input provided by either the Vendor or the REIT Manager. And the price of $23m was by design rather than by valuation
What is the latest news and how the REIT manager going to handle and explain ?