Mr Salvatore Gregory Takoushian (Mr Takoushian) was charged today for disclosure-related offences under the Securities and Futures Act (SFA).
2 Mr Takoushian was the former Chief Executive Officer of Eagle Hospitality Trust REIT Management Pte. Ltd. and Eagle Hospitality Business Trust Management Pte. Ltd., the managers responsible for managing Eagle Hospitality Trust (EHT), a stapled trust comprising Eagle Hospitality REIT (EH-REIT) and Eagle Hospitality Business Trust. Mr Takoushian currently faces 4 charges under section 203(1) read with section 331(1) of the SFA for consenting to EHT’s reckless non-disclosure of information that was necessary to avoid the establishment of a false market.
3 Under master lease agreements governing the properties in EHT’s portfolio, the master lessees were required to provide, by 7 June 2019, standby letters of credit amounting to US$20 million, being the balance of security deposits owed to EH-REIT. The charges against Mr Takoushian concerned EHT’s alleged reckless failure to disclose to the Singapore Exchange Limited (SGX) information pertaining to the failure by the master lessees to fund the shortfall in security deposits at various points in time between 7 June 2019 and 14 February 2020. The failure to provide the balance of security deposits led to a default under the master lease agreements and in turn, a default on a US$ 341 million loan made to EH-REIT, among other borrowers.
4 The investigation was jointly conducted by the Monetary Authority of Singapore and the Commercial Affairs Department of the Singapore Police Force.[1]
5 If convicted, for each charge, Mr Takoushian faces a fine of up to $250,000 or imprisonment for a term of up to 7 years, or both.
6 The investigations against the other former directors of EHT’s managers are ongoing.
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Additional Information:
Securities and Futures Act (Chapter 289) (SFA)
Section 203(1) SFA states: “A person to whom this subsection applies must not intentionally, recklessly or negligently fail to notify the approved exchange of such information as is required to be disclosed by the approved exchange under the listing rules or any other requirement of the approved exchange, if the person is required by the approved exchange under the listing rules or any other requirement of the approved exchange to notify the approved exchange of information on specified events or matters as they occur or arise for the purpose of the approved exchange making that information available to an organised market operated by the approved exchange.
(2) Subsection (1) applies to the following:
(a) an entity, the securities or securities-based derivatives contracts of which are listed for quotation on an approved exchange;
(b) a trustee-manager of a business trust, where the securities or securities-based derivatives contracts of the business trust are listed for quotation on an approved exchange;
(c) a responsible person of a collective investment scheme, where the units in the collective investment scheme are listed for quotation on an approved exchange.
(3) Despite section 204 or 335, a contravention of subsection (1) is not an offence unless the failure to notify is intentional or reckless.”
Section 204(1) of the SFA states: “Any person who contravenes any of the provisions of this Division shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 7 years or to both."
Section 331(1) of the SFA states: “Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of an officer of the body corporate, the officer as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.”
