SIAS Questions to Dasin Retail Trust

Date: July 10, 2023

To :     Chairman & Board of Directors
Ms. Wang Qiu, CEO
Dasin Retail Trust Management Pte Ltd

We should be pleased if you could provide us with the replies to the following questions on behalf of your unitholders.

1. The trust has announced its financial results for the fourth quarter and full year ended 31 December 2022 on 10 July 2023. Revenue for FY2022 declined from S$101.3 million to $85.3 million while total property operating expenses increased from S$32.1 million to S$38.1 million. FY2022 net income was S$8.4 million. As the group recognised fair value losses on its investment properties amounting to S$(361.9) million, loss for the period attributable to unitholders of the trust and total comprehensive loss for FY2022 was S$(277.9) million and S$(422.0) million respectively. No distribution to unitholders was declared as the trust has defaulted on the loans in the amount of approximately S$910 million as announced on 2 and 19 January 2023. While net asset value for the group has plummeted from $1.40 per unit as at FY2021, it still stands at $0.84 per unit as at 31 December 2022. Can the trust explain to unitholders the hurdles, if any, in disposing some of its assets to deleverage and to address the default?
2. Can the trust provide an on-the-ground update on the operating statuses of the seven malls in Guangzhou Province?
3. In addition, please clearly define the roles and responsibilities of the management team, including those of Ms. Wang Qiu (CEO of the trustee-manager) and Mr. Steven Ng Mun Fai (CFO). What is the level of involvement by the board in operational and strategic matters, especially Dr. Kong Weipeng who is the chairman of the board and Mr. Tan Huay Lim, the lead independent director? In the opinion of the directors, have material developments, such as the rental arrears and lease terminations, been announced by DRT in a timely manner? If not, why not?
4. What are the roles, if any, of Mr Zhang Zhongming and Mr Zhang Zhencheng in the DRT, DRTM and/or any associated entities? What are the roles of New Harvest Investments Limited and Sino-Ocean Capital Holding Limited, if any?
5. How effective is the trustee-manager, DRTM, in handling the matters of the trust, especially with a winding up petition against Sino Ocean Capital in Hong Kong? How closely is the trustee-manager working with the board of directors?
6. Who is in possession of the company seals such as the corporate seal, legal representative seal, financial seal and contract seal etc?
7. With the decrease in fair value of the investment properties by 16% in RMB terms (RMB1.76 billion) and 23% in SGD terms (SGD548 million), the trust is now in breach of the gearing ratio, interest coverage ratio and loan to valuation ratio required under its Offshore Facilities. How does this impact the refinancing of both the offshore and onshore facilities and what is the progress made in the refinancing of the facilities?
8. What is the status of the proposed sale of the Shiqi Metro Mall and Xiaolan Metro Mall (or any other assets of the trust)?
9. Further to the trust’s announcement dated 6 July 2023 in which it was disclosed that the “reputable Chinese entity” will be ceasing negotiations. Now that the Memorandum of Understanding (MOU) has been terminated, please state all the options that are being explored by DRT in its restructuring and include details on the person(s) leading the negotiation, the assets involved, the counter-parties, the progress etc. In addition, it has been revealed that some unitholders have expressed concerns regarding the potential illegality of transactions outlined in the MOU under Chinese laws. What is the opinion of the board and management on this? Specifically, can the board provide clarity on the specific transactions in question and the potential laws that might be breached?

Regards
David Gerald
President and CEO
SIAS