Business Trusts Act 2004 · 2020 Revised Edition · Part 6 · Liability and Take-Overs
40A. Power to acquire units of unitholders dissenting from arrangement or contract approved by 90% majority
Feedback & supportLast amended by an amending law of 2022. 3 amendments in all.
Where an arrangement or a contract involving the transfer of all of the units, or all of the units in any particular class, in a registered business trust (called in this section the subject trust) to —
registered business trust
“registered business trust” means a business trust that is registered by the Authority under section 4(1);
the trustee of another trust (including the trustee‑manager of another business trust and the trustee of a real estate investment trust); or
any other person,(called in this section the transferee) has, within 4 months after the making of the offer in that behalf by the transferee, been approved as to the units or as to each class of units whose transfer is involved by the holders of at least 90% of the total number of those units or of the units of that class (other than units already held at the date of the offer by the transferee), the transferee may, at any time within 2 months after the offer has been so approved, give notice in the prescribed manner to any dissenting unitholder that it desires to acquire the units of the dissenting unitholder.
When a notice mentioned in subsection (1) is given, the transferee is, unless on an application made by a dissenting unitholder within one month from the date on which the notice was given or within 14 days of a statement being supplied to a dissenting unitholder under subsection (3) (whichever is the later) a court thinks fit to order otherwise, entitled and bound to acquire those units —
on the terms which under the arrangement or contract the units of the approving unitholders are to be transferred to the transferee; or
if the offer contained 2 or more alternative sets of terms, on the terms which were specified in the offer as being applicable to dissenting unitholders.
Where alternative terms were offered to the unitholders, a dissenting unitholder is entitled to elect which of those terms the dissenting unitholder prefers, on or before the later of the following dates:
the last day of one month after the date on which the notice is given under subsection (1); (b)the 14th day after a statement is supplied under subsection (3).
In offering alternative terms to the unitholders, the transferee must state which of those terms is to apply to the acquisition of the units of a dissenting unitholder where the dissenting unitholder fails to make the election within the time allowed under subsection (2A).
In determining whether the arrangement or contract has been approved by the holders of the requisite number of units, or units of any particular class, under subsection (1), the units that are issued after the date of the offer are to be disregarded.
Where a transferee has given notice to any dissenting unitholder of the subject trust that it desires to acquire the units of the dissenting unitholder, the dissenting unitholder is entitled to require the trustee-manager of the subject trust by a written demand served on the trustee-manager of the subject trust, within one month from the date on which the notice was given, to supply the dissenting unitholder with a written statement of the names and addresses of all other dissenting unitholders as shown in the register of unitholders of the subject trust; and the transferee is not entitled or bound to acquire the units of the dissenting unitholders until 14 days after the posting of the statement of such names and addresses to the dissenting unitholder.
trustee‑manager
“trustee‑manager”, in relation to a registered business trust, includes a replacement trustee‑manager and temporary trustee‑manager;
Where, pursuant to any such arrangement or contract, units in the subject trust are transferred to a transferee or its nominee and those units together with any other units in the subject trust held by the transferee at the date of the transfer comprise or include 90% of the total number of the units in the subject trust or of any class of those units, then —
the transferee must within one month from the date of the transfer (unless on a previous transfer pursuant to the arrangement or contract it has already complied with this requirement) give notice of that fact in the prescribed manner to the holders of the remaining units in, or of the remaining units of that class of units in, the subject trust who have not assented to the arrangement or contract; and
any such holder may within 3 months from receiving the notice require the transferee to acquire the units of the holder.
Where a unitholder has given notice under subsection (4)(b) with respect to any units, the transferee is entitled and bound to acquire those units —
on the terms on which under the arrangement or contract the units of the approving unitholders were transferred to it; or
on any other terms that are agreed or that the court on the application of either the transferee or the unitholder thinks fit to order.
Where a notice has been given by the transferee under subsection (1) and a court has not, on an application made by the dissenting unitholder, ordered to the contrary, the transferee must —
after the expiry of one month after the date on which the notice has been given;
after 14 days after a statement has been supplied to a dissenting unitholder under subsection (3); or
if an application to the court by the dissenting unitholder is then pending, after that application has been disposed of,transmit a copy of the notice to the trustee of the subject trust together with an instrument of transfer executed on behalf of the unitholder by any person appointed by the transferee and on its own behalf by the transferee, and pay, allot or transfer to the trustee of the subject trust the amount or other consideration representing the price payable by the transferee for the units which by virtue of this section the transferee is entitled to acquire, and the trustee of the subject trust must thereupon register the transferee as the holder of those units.
Any sums received by the trustee of the subject trust under this section must be paid into a separate bank account, and any such sums and any other consideration so received must be held by that trustee in trust for the several persons who had held the units in respect of which they were respectively received.
Where any money or other consideration is held in trust by the trustee of the subject trust for any person under this section, the trustee holding the money or other consideration may, after the expiry of 2 years and must, before the expiry of 10 years, after the date on which such money or other consideration was received by the trustee, transfer the money or other consideration to the Official Receiver.
Official Receiver
“Official Receiver” has the meaning given by section 2(1) of the Insolvency, Restructuring and Dissolution Act 2018;
The Official Receiver must —
deal with any moneys received under subsection (8) as if the moneys were paid to the Official Receiver pursuant to section 49; and
sell or dispose of any other consideration so received under subsection (8) in any manner that he or she thinks fit and must deal with the proceeds of the sale or disposal as if it were moneys paid to him or her pursuant to section 49.
In determining the units in the subject trust already held by the transferee at the date of the offer under subsection (1) or the percentage of the total number of units in the subject trust or of any class of those units held by the transferee under subsection (4), units held or acquired —
by a nominee on behalf of the transferee;
where the transferee is a corporation, by its related corporation or by a nominee of the related corporation;
where the transferee is the trustee‑manager of a business trust or the trustee of a real estate investment trust —
by a person who controls more than 50% of the voting power in the business trust or real estate investment trust, or by a nominee of that person;
by the trustee‑manager of the business trust on its own account, or by the manager for the real estate investment trust, or by a nominee of the trustee‑manager or manager; or
by a related corporation of the trustee‑manager for the business trust or the manager for the real estate investment trust or by a nominee of that related corporation; or
where the transferee is the trustee of a trust that is not a business trust or a real estate investment trust, by a related corporation of the trustee (being a corporation) or by a nominee of that related corporation,is to be treated as held or acquired by the transferee.
To avoid doubt, in this section —
a reference to a transferee (being the trustee of a trust) holding, acquiring or contracting to acquire units in another trust is a reference to the transferee doing any of these as trustee of the firstmentioned trust; and
a reference to a transfer of units of a trust to a transferee (being the trustee of another trust) is a reference to such transfer of units to the transferee as trustee of that other trust.
The reference in subsection (1) to units already held by the transferee —
includes a reference to units which the transferee has contracted to acquire; but(b)excludes units which are the subject of a contract binding the holder of the units to accept the offer when it is made, being a contract entered into by the holder for no consideration and under seal or for no consideration other than a promise by the transferee to make the offer.
Where, during the period within which an offer for the transfer of units to the transferee can be approved, the transferee acquires or contracts to acquire any of the units whose transfer is involved but otherwise than by virtue of the approval of the offer, then the transferee may be treated for the purposes of this section as having acquired or contracted to acquire those units by virtue of the approval of the offer if, and only if —
the consideration for which the units are acquired or contracted to be acquired (called in this subsection the acquisition consideration) does not at that time exceed the consideration specified in the terms of the offer; or
those terms are subsequently revised so that when the revision is announced the acquisition consideration, at the time mentioned in paragraph (a), no longer exceeds the consideration specified in those terms.
In this section —
“dissenting unitholder” includes a unitholder who has not assented to the arrangement or contract and any unitholder who has failed or refused to transfer the units of the unitholder to the transferee in accordance with the arrangement or contract;
“real estate investment trust” has the meaning given by section 2(1) of the Securities and Futures Act 2001;
“register of unitholders” includes any records kept by the trustee-manager of the subject trust, or with respect to the subject trust, of the names and addresses of holders of derivatives of units in a registered business trust.
In this section and sections 40B and 40C, “units”, in relation to a registered business trust, includes derivatives of units in a registered business trust.
In this section and section 40C, “unitholders” includes holders of derivatives of units in a registered business trust but does not include a person who holds derivatives of units in a business trust only beneficially.
business trust
“business trust” means —(a)a trust that is established in respect of any property and that has the following characteristics:(i)the purpose or effect, or purported purpose or effect, of the trust is to enable the unitholders (whether by acquiring any right, interest, title or benefit in the property or any part of the property or otherwise) to participate in or receive profits, income or other payments or returns arising from the management of the property or management or operation of a business;(ii)the unitholders of the trust do not have day‑to‑day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management;(iii)the property subject to the trust is managed as a whole by a trustee or by another person on behalf of the trustee;(iv)the contributions of the unitholders and the profits or income from which payments are to be made to them are pooled; and(v)either —(A)the units in the trust that are issued are exclusively or primarily non-redeemable; or(B)the trust invests only in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes mentioned in section 284 of the Securities and Futures Act 2001 and is listed on an approved exchange; or(b)a class or description of trust that is declared by the Authority, by notice published in the Gazette, to be a business trust for the purposes of this Act,but does not include the types of trusts specified in the Schedule;
Nothing in the definition of “units” in subsection (15) is to be read as requiring any units to be treated —
as units of the same class as those into which they are convertible or for which the holder is entitled to subscribe; or
as units of the same class as other units by reason only that the units into which they are convertible or for which the holder is entitled to subscribe are of the same class.