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[SINGAPORE] The travails of Dasin Retail Trust (DRT) unitholders continue. From a unit price of around S$0.80 in 2020, the counter’s value has practically evaporated to a paltry S$0.02 as at Apr 21, 2025. The trust’s market capitalisation of around S$16 million is barely enough to buy a starter bungalow. 

Some of the loss in value is due to the regulatory clampdown on property financing in China, where DRT has a portfolio of retail malls, in the cities of Zhongshan, Zhuhai and Foshan. The trust also faced challenges, especially during the Covid-19 pandemic.

Minority investors have little reason to be drawn to DRT. Those looking for its financials will find that the latest available are the results for the six months ended Jun 30, 2023. Under the trustee-manager, Dasin Retail Trust Management, the last annual general meeting held was for FY2021. 

But it is the wrangling with the trust’s large unitholders that has led to the loss in shareholder value. The latest episode in this long-running drama saw the trustee-manager declare that an extraordinary general meeting (EGM) called by several dissenting unitholders was “invalid and ineffective”, with any resolutions passed during the EGM void.

Putting aside the merits of each side’s arguments, one of the issues the DRT saga illustrates is the challenge for a listed issuer to operate when stakes are held through nominee accounts. 

Under the Companies Act, a shareholder or a group of like-minded shareholders representing at least 10 per cent of the company are permitted to requisition an EGM. These provisions are similarly found in the Business Trusts Act.

At this point in time, a group of DRT unitholders has tried three times to call for a unitholders’ meeting; the unitholders involved held their stakes through nominee companies. 

One of the reasons given by the trustee-manager was that the requisition notice for the EGM was not signed by the registered holders in the depository register. Therefore, how was it possible to verify that those calling for the meeting indeed held the requisite 10 per cent or more?

Scroll through the list of the top 20 shareholders in any annual report. Often, you’ll see shareholders such as DBS Nominees or Citibank Nominees listed. These are nominee shareholders who are on record as the registered unitholder; they hold the securities on behalf of beneficial owners, who could be individuals or companies. 

Many shareholders have valid reasons for not wanting to hold shares in their name, as opposed to holding them directly in the Singapore Exchange’s (SGX) Central Depository (CDP).

This could be on account of having a private banking relationship where the bank holds all the shares on its client’s behalf. It could also be due to the ease of having both the sub-depository account and the trading account with the same broker.

In 2023, there was a court case involving SGX-listed USP Group, in which the matter of beneficial shareholders seeking to requisition an EGM was raised.

In his judgment, Judicial Commissioner Goh Yihan said that looking at the relevant sections in the Securities and Futures Act, “in respect of a public listed company whose shares may be held as book-entry securities through the CDP, its members are those whose names appear as account holders or depository agents in a register maintained by the CDP”.

“More importantly, only those who directly hold an account with the CDP (which includes the various brokerage houses in the present application) are deemed as members. Sub-account holders, such as the requisitionists, are not deemed to be members,” he added.

The judge noted that to be defined as “members”, the requisitionists could open a CDP account to hold their shares of USP Group. 

An easier time as a beneficial shareholder 

Lawyers say that there is growing awareness among nominee firms that they may need to support their clients in signing off on a requisition notice. 

While that may be the case, the way investors hold their stakes is also getting more complicated. An overseas investor may open his or her account with a foreign nominee or custodian, who may in turn hold securities with a local nominee company. 

The investor now has the difficult task of convincing two nominee companies to cooperate if he or she wishes to requisition a meeting.

Nominee companies are typically banks or broking firms that earn a fee for performing what they see as an administrative role. For example, they look after account-related matters, such as asking the beneficial shareholders how they want the nominee to vote as proxies at a shareholders’ meeting.

While shareholders can look at opening a CDP account to hold their stakes directly, anecdotally, the CDP will request certain know-your-client information, making it more challenging for foreign investors, particularly foreign retail investors.

Investor protection 

DRT has its fair share of problems. Its trustee-manager is technically insolvent, but has been able to secure a moratorium. Without an earlier EGM that could have resolved the direction of the business, affairs have dragged on. The prospects for unitholders look poor. 

As Singapore strives to make the stock market more vibrant, the nominee issue may be something that needs to be addressed – by legislation perhaps – rather than by ad hoc measures.

For one, it slows down the process of calling for a shareholder meeting, which is part and parcel of how a company operates according to the Companies Act, or how a business trust operates via the Business Trusts Act.

It can also affect how involved retail shareholders are in company matters. Increasingly, more investors are holding their stakes through nominee companies, including private banks. Transacting is much more straightforward when shares are held directly with the CDP. 

Voting on resolutions is possible, but there is considerably more paperwork: The company must approach the nominee bank, which then has to collate all the votes from those who do vote, and then send the information back to the company. With a tight timeframe in which to act, retail investors are likely to sit things out. 

Investor protection is not just about being able to vote, but also about being able to requisition shareholder meetings in the first place, to keep the board or external manager on its toes.