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The latest announcement is out from EC World Real Estate Investment Trust ( (SG:BWCU) ).
EC World REIT’s manager has disclosed that subsidiary Hangzhou Beigang Logistics has been ruled jointly liable, along with other non-group entities, for RMB3.515 billion in a judgement by the Hangzhou Intermediate Court over guarantees tied to obligations of its sponsor, Forchn Holdings Group. The manager’s PRC counsel has warned that if Beigang does not appeal, the contingent liability could become binding and subject to enforcement, raising significant potential financial and legal exposure for the REIT’s structure.
Management told the board it had not authorised Beigang to enter into the guarantee and that the company seal was affixed without approval, prompting inquiries into how the lapse occurred and why disclosure of the litigation to the board and market was delayed. The manager is consulting legal advisers on the judgement’s impact and has cautioned unitholders and investors to exercise care when dealing in units, signalling heightened governance scrutiny and uncertainty over the trust’s risk controls and contingent liabilities.
More about EC World Real Estate Investment Trust
EC World Real Estate Investment Trust is a Singapore-listed REIT focused on income-producing logistics and industrial properties, with assets held through subsidiaries such as Hangzhou Beigang Logistics Co., Ltd. The trust’s portfolio is concentrated in China, and it is managed by EC World Asset Management Pte. Ltd. on behalf of its unitholders.
Technical Sentiment Signal: Sell
Current Market Cap: S$226.8M
Learn more about BWCU stock on TipRanks’ Stock Analysis page.