21 November 2011

The Editor
Business Times

Dear Editor,

Mr Jayaraman offered some suggestions to better align the interests of REITs managers with those of shareholders (“Tie Reit managers' pay to DPU, valuations”, BT letters, 16 November 2011).
                                                                  
There are rules in place that seek to safeguard investors’ interest where there are interested party transactions. For instance, such transactions that are 5% or more of the REIT’s net asset value are subject to voting by independent unitholders; two independent valuations have to be obtained, with limits set on the sale and purchase prices; and acquisition fees paid to the manager are to be in the form of units with a one-year moratorium on their disposal.

The Monetary Authority of Singapore (MAS) will consider issuing further guidance to the industry as part of our ongoing effort to enhance corporate governance in REITs and other listed entities.

However, corporate governance rules and guidelines cannot envisage all possible circumstances.  MAS expects all entities accessing Singapore’s capital markets to uphold high standards of corporate governance. When observing such rules and guidelines, companies and their Boards must always bear in mind the interests of shareholders or unitholders; and not take an overly technical approach.

Angelina Fernandez
Director (Communications)
Monetary Authority of Singapore