MAS issues notice to remove Eagle Hospitality Reit's manager

SINGAPORE (THE BUSINESS TIMES) – The Monetary Authority of Singapore (MAS) on Monday (Oct 26)┬áissued a notice of intention to remove the manager of Eagle Hospitality Reit (EH-Reit) and to appoint a new manager.

This is in view of numerous breaches of the Securities and Futures Act (SFA) by the manager, EH-Reit Management, and serious concerns over its ability to comply with rules and regulations, said MAS.

Since it was licensed in May last year, EH-Reit Management has committed multiple breaches of the SFA, including breaches of the minimum base capital and financial resources requirements, said MAS.

The central bank and financial regulator added that it has serious concerns about the management’s ability and commitment to comply with its rules and regulations.

It thus deems it necessary to direct EH-Reit’s trustee, DBS Trustee, to remove the management.

EH-Reit Management had breached these financial requirements for the first time in the fourth quarter of last year, but informed MAS only in April.

The management breached the same base capital requirement for the second and third time on Aug 31 and Sept 30, respectively, MAS said, despite direction for it to rectify breaches and take steps to enhance the monitoring of financials.

Other breaches include not seeking the authority’s approval before providing financial assistance to a subsidiary, late submissions of regulatory returns, and failure to present to unit holders audited financial statements of EH-Reit within the stipulated timeframe.

The manager of EH-Reit has been managing Eagle Hospitality Trust (EHT) – a stapled trust comprising EH-Reit and Eagle Hospitality Business Trust – since it was listed on the mainboard of the Singapore Exchange on May 24 last year.

Trading of EHT units was voluntarily suspended on March 24 after EH-Reit defaulted on a loan of US$341 million (S$464 million).

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