Treasury China Trust (TCT), a Singapore-listed investment trust, is suddenly having to defend itself against charges from one of its investors that the firm is run for the benefit of its fund managers and lacks independent board oversight.
Mano Sabnani, a minority shareholder in TCT wrote a letter to Singapore’s Business Times newspaper calling for an investigation by the Singapore stock exchange (SGX) into the way the property company is run. The letter indicated that shareholders of TCT’s trustee-manager, Treasury Holdings Real Estate Pte Ltd, have too much power in the company, and not the directors of TCT or its unit-holders.
Mr Sabnani also noted that although Goldman Sachs had been appointed by the trustee-manager to advise on closing the gap between net asset value per unit and the trading price of the TCT units, Goldman’s report had not been made public.
Responding to the accusations in an interview with the Irish Times, Richard David, chief executive of Treasury China Trust (TCT), denied the charges and indicated that controls over the group’s management by Singapore regulatory bodies should be sufficient to protect shareholders’ interests.
“I’m not decrying any other listing environment, but the Singapore Stock Exchange (SGX) are very diligent about these matters and if they had any concerns around corporate governance, I’m sure they would let us know,” said Mr David, who is executive director of TCT’s trustee manager, Treasury Holdings Real Estate Pte Ltd (Thre). and TCT’s chief executive.
In the interview, Mr David rejected the implications in the letter that Mr Ronan and Mr Barrett’s ownership had compromised the trust’s corporate governance.
“There are no specific instances of a lack of corporate governance given,” David said. “We are a majority independent board. Is he suggesting that there is something wrong with the independent directors? Just because Johnny Ronan and Richard Barrett own 30 per cent of the company, the company is poorly run?”
TCT listed in Singapore in June 2010 and has substantial real estate holdings in China. Treasury Holdings directors Richard Barrett and Johnny Ronan hold a 30 per cent stake in TCT. Treasury Holdings itself holds no units in TCT.
The danger signs were there with these two (Barrett & Ronan); since then we had the Treasury Holdings debacle, Barrett’s links with Chinese govt. projects, the scrutiny by the EU of Bartra’s activities (FDI screening).
And most inexplicably of all, his company seem to go out of their way in Ireland to pick the most controversial developments that will inevitably end up mired in challenges (protected sites on the coast & adjoining listed buildings – they’re not even the most economically sensible options).
I think, from reading interviews with both men, that it results from hubris. Ronan courts the ‘buccaneer’ gushes of an infatuated media. With Barrett, the issue is less flashy but runs deeper – he sees himself as a being on another plane on a mission to transform society, rather than an entrepreneur out to make a few bucks with a more or less relativist view of the rights & wrongs of what they’re doing (ie, the normal kind).
Trouble is, no-one asked him to.