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Compliance Corner: MAS, Eagle Hospitality

Editorial Staff, 27 October 2020

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The latest compliance news: regulatory developments, punishments, guidance, permissions and new product and service offerings.

Monetary Authority of Singapore
The Monetary Authority of Singapore has ordered that DBS Trustee Limited, the trustee of Eagle Hospitality Real Estate Investment Trust, must fire Eagle Hospitality REIT Management Pte as the manager, and appoint a new one.

The regulator has acted after what it said in a statement yesterday were “numerous breaches” of the Securities and Futures Act by EH-REIT Mgt, and “serious concerns” over its ability to comply with rules and regulations.

Breaches by EH-REIT Mgt included violations of minimum base capital and financial resources requirements. EH-REIT Mgt broke these requirements for the first time in the fourth quarter of 2019 but only informed MAS of these breaches in April the following year. 

“Notwithstanding MAS’ direction in April 2020 to rectify the breaches and to take steps to enhance the monitoring of its financials, EH-REIT Mgt breached the same base capital requirement for a second and third time on 31 August 2020 and 30 September 2020 respectively,” MAS said in a statement. 

Other breaches by EH-REIT Mgt included failuring to seek MAS’ approval for its provision of financial assistance to a subsidiary; late submissions of regulatory returns; and failing to present to unitholders audited financial statements of EH-REIT within the stipulated timeframe.

MAS has serious concerns about the EH-REIT Mgt’s ability and commitment to comply with MAS’ rules and regulations. MAS therefore deems it necessary to direct DBS Trustee Limited to remove EH-REIT Mgt from managing EH-REIT and appoint a new manager,” the regulator said.

The watchdog added that it will give a final decision after checking any written submissions from DBS Trustee Ltd and EH-REIT Mgt, which will be given 10 business days to respond upon receipt of notice.

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