SGX-Listed Dasin Retail Trust Pursued by Former Directors on Allegations of Unpaid Debts

The manager of mainland mall REIT Dasin Retail Trust has received a sixth debt collection notice in five weeks from former officers of the company or their associates as its erstwhile management joins bondholders in pursuing repayment from the manager of seven malls in China’s Guangdong province

Dasin Retail Trust Management Pte Ltd (DRTM), the trustee-manager of the Singapore REIT received a statutory letter of demand dated 4 March for payment of S$99,139.13 in director’s fees allegedly owed to former non-executive director Sun Shu for the period from 1 August 2022 to 29 August 2023, when Sun had resigned from the trust.

“The Trustee-Manager is currently seeking legal advice in respect of the aforesaid statutory demand letter. The Trustee-Manager will make further announcement on the SGXNET in the event there are any material developments which warrant disclosure, in compliance with its obligations under the Listing Manual,” Dasin Retail Trust Management said in a filing to the Singapore Exchange on Thursday.

Sun’s letter is the latest development in the unraveling of defaulted Dasin Retail Trust which has seen two of its senior executives fired, demands for at least S$1.1 million in alleged unpaid salaries and borrowings, two winding-up petitions, and unitholders voting to oust the trustee-manager, all in the first 10 weeks of the year.

Ongoing Drama

Sun’s demand letter comes two weeks after Wang Qiu, whom DRTM terminated as chief executive of the REIT manager less than two weeks after she issued her own demand letter for unpaid salary, filed a winding-up application against the trustee-manager late last month.

Wang’s application came around a week after Zhang Guiming, nephew of the trust’s former chairman Zhang Zhencheng, filed a separate winding-up application against DRTM. Zhang Guiming had issued a letter of demand in January alleging S$272,000 in funds owed by the trustee-manager.

The hearing for both Wang and Zhang’s winding-up applications is set for 15 March.

“The Trustee-Manager is seeking legal advice in respect of the aforesaid winding-up application, and intends to dispute Wang Qiu’s claims and take steps to stay the winding-up application pending the resolution of the dispute with Wang Qiu,” DRTM said in a response to Wang’s winding-up application.

DRTM, which is controlled by defaulted mainland developer Sino-Ocean Group, on 2 February received letters of demand from Wang, then general manager of investment division Lu Zhiqi, chief financial officer Ng Mun Fai, and executive secretary Liu Ting, for payment of S$783,376 in back salary and other alleged debts. The trust manager fired Lu on 5 February.

Earlier this week, DRTM disclosed that Lu has made a claim against the trustee-manager on grounds of unfair dismissal, with the company disputing the claim.

After sacking Wang and Lu, the trustee-manager appointed Wang Peng, a former Sino-Ocean executive who previously held investment and operations roles with the Beijing-based developer, as DRTM’s acting chief executive officer and chief investment officer.

Unitholders Revolt

At the same time that it battles its former management, DRTM is also facing a backlash from a group of the trust’s minority unitholders, who convened an extraordinary general meeting (EGM) on 19 February which saw a near-unanimous approval of resolutions to remove DRTM as trustee-manager “as soon as practicable.” Shareholders at the meeting also voted to internalise the REIT’s trustee-manager function by appointing an independent trustee.

The EGM to internalise the trustee-manager function was demanded in November by 15 unitholders said to hold more than 10 percent of the trust’s total voting rights who notified the board of their intent to put the resolution to a vote. A day before the EGM, DRTM declared the event “invalid” as it disputed the unitholder status of the parties filing for the meeting.

The trust is currently struggling to work with creditors to restructure its debt after defaulting on offshore borrowings last year.

Dasin Retail Trust, which owns five malls in Zhongshan and one mall each in Zhuhai and Foshan, saw the valuation of its portfolio fall 4.6 percent to RMB 9.1 billion in June 2023 from RMB 9.5 billion in December 2022, with average occupancy declining to 84.5 percent from 91.5 percent in the same period.

“The primary reason for the decrease in the valuation is attributable to the general weaker economic and market environment, lower passing rent, negative reversion in rental rate and lower occupancy rate,” the trustee-manager said in a filing last month.