BURSA ANNOUCEMENTS

Date : 09 May 2011

MATERIAL LITIGATION SUNWAY REAL ESTATE INVESTMENT TRUST - LEGAL PROCEEDINGS INSTITUTED BY METROPLEX HOLDINGS SDN BHD AGAINST COMMERCE INTERNATIONAL MERCHANT BANKERS BERHAD, OSK TRUSTEES BERHAD, SUNWAY REAL ESTATE INVESTMENT TRUST, AHMAD FAIRUZ BIN MOHD PUZI (AS AN OFFICER OF THE COURT HAVING CONDUCT OF THE AUCTION OF PUTRA PLACE ON 30 MARCH 2011, DIRECTOR OF LAND AND MINES FEDERAL TERRITORY OF KUALA LUMPUR, DEPUTY COLLECTOR OF STAMP DUTY JALAN DUTA AND SUNWAY REIT MANAGEMENT SDN BHD (ORIGINATING SUMMONS NO: 21NCVC-95-2011)

SUNWAY REAL ESTATE INVESTMENT TRUST

TypeAnnouncement
SubjectMATERIAL LITIGATION
DescriptionSUNWAY REAL ESTATE INVESTMENT TRUST
- LEGAL PROCEEDINGS INSTITUTED BY METROPLEX HOLDINGS SDN BHD AGAINST COMMERCE INTERNATIONAL MERCHANT BANKERS BERHAD, OSK TRUSTEES BERHAD, SUNWAY REAL ESTATE INVESTMENT TRUST, AHMAD FAIRUZ BIN MOHD PUZI (AS AN OFFICER OF THE COURT HAVING CONDUCT OF THE AUCTION OF PUTRA PLACE ON 30 MARCH 2011, DIRECTOR OF LAND AND MINES FEDERAL TERRITORY OF KUALA LUMPUR, DEPUTY COLLECTOR OF STAMP DUTY JALAN DUTA AND SUNWAY REIT MANAGEMENT SDN BHD (ORIGINATING SUMMONS NO: 21NCVC-95-2011)
We wish to announce that Metroplex Holdings Sdn Bhd (“Plaintiff”) had on 6 May 2011 through their lawyer served an Originating Summons dated 4 May 2011 and an affidavit affirmed by Mok Pak Hong on 3 May 2011, at the registered address of OSK Trustees Berhad (“Second Defendant”) and Sunway REIT Management Sdn Bhd (“Seventh Defendant”). The same documents addressed to Sunway Real Estate Investment Trust (“Third Defendant”) were served on the registered address of the Seventh Defendant. The other defendants in the Originating Summons are Commerce International Merchant Bankers Berhad (“First Defendant”), Ahmad Fairuz bin Mohd Puzi (as an officer of Court having conduct of the auction of Putra Place on 30 March 2011) (“Fourth Defendant”), the Director of Land and Mines Federal Territory of Kuala Lumpur (“Fifth Defendant”) and the Deputy Collector of Stamp Duty Jalan Duta (“Sixth Defendant”).
The Plaintiff is seeking the following from the High Court of Malaya in Kuala Lumpur:

1. to decide on various questions which are summarised as follows:-
      1.1 That on a true interpretation of Section 253(3) of the National Land Code 1965, the Conditions of Sale No. 2 as prepared by the First Defendant is ultra vires the National Land Code 1965 and therefore null and void.
          1.1.1 A declaration that the First Defendant interfered in the process of law by limiting the potential bidders that took part in the auction of Putra Place on 30 March 2011 (“Public Auction”).

      1.2 That based on a true interpretation of Section 253(4) of the National Land Code 1965, the First Defendant or chargee does not have any role at the Public Auction according to Section 259 of the National Land Code 1965. A declaration that the First Defendant through its agent Mr Alan Adrian Gomez interfered in the Public Auction by:-
          (a) taking an active part in the entrance of the auction room by checking the people that wish to enter the auction room;

          (b) informing the licensed auctioneer to read the Proclamation of Sale.
      1.3 That based on a true interpretation of Section 257(1)(d) and (e) and Section 260 National Land Code 1965 there is a distinction between the role of a Registrar of the High Court and an officer of the Court that conducted the Public Auction.
          1.3.1 A declaration that the Fourth Defendant has no power and jurisdiction in making a judicial decision on matters that did not arise during the Public Auction and his decision is ultra vires the National Land Code 1965 and should be set aside.

      1.4 That based on the true interpretation of Section 259(2)(a) of the National Land Code 1965 that it is the responsibility of the Fourth Defendant to accept the bids during the Public Auction.
          (a) A declaration that on 30 March 2011 for the auction of Putra Place, the Fourth Defendant did not receive any offer or bid and therefore there is no auction of Putra Place;

          (b) A declaration that as the Fourth Defendant did not accept any offer, the sale (if any) to the Second Defendant is a sale by private treaty and is null and void.
      1.5 A declaration that Mr Alan Adrian Gomez whether as a solicitor for the First Defendant or a representative of the Second Defendant interfered in the said auction.

      1.6 A declaration that the exclusion of the public from the Public Auction by the Fourth Defendant and the First Defendant through its agent, Mr Alan Adrian Gomez, converted the Public Auction into a private auction and any decisions made by the Fourth Defendant thereafter is ultra vires the National Land Code 1965 and is null and void and of no effect.

      1.7 A declaration that the presence of Dato’ Ng Tiong Lip who was allowed to enter the auction room by the Fourth Defendant and/or the First Defendant through their agent, Mr Alan Adrian Gomez, and the Second Defendant through their agent Mr Alan Adrian Gomez has converted the Public Auction into a private auction;

      1.8 A declaration that the presence of Mr Sree Harry in the auction room without any letter of authorization from any parties and allowed to enter the auction room by the First Defendant and/or the Fourth Defendant has made the Public Auction into a private auction.

      1.9 A declaration that the refusal to allow Mr Robert Ti to be in the auction room by the Fourth Defendant with the assistance of security officer of the Court changed what is meant to be a Public Auction into a private auction.

      1.10 That the letter of authorization given by the Second Defendant did not comply with Condition No. 2 of the Bahasa Melayu version of the Conditions of Sale.
          (a) a declaration that the presence of Ms Woo Lai Mei has converted the Public Auction into a private auction;

          (b) that the sale (if any) perfected through a private auction is a sale by private treaty in the presence of the agent of the First Defendant with the encouragement of the Fourth Defendant;

          (c) a declaration that the Fourth Defendant ought to have rejected the letter of authorization given by the Second Defendant and asked Ms Woo Lai Mei, Dato’ Ng Tiong Lip and Mr Sree Harry to leave the auction room, consistent with the treatment given to Mr Robert Ti as prayed in paragraph 1.9 above;

          (d) a further declaration that with the exclusion of Ms Woo Lai Mei, Dato’ Ng Tiong Lip and Mr Sree Harry, the Fourth Defendant ought to have declared that the Public Auction as failed for no bidders.
      1.11 A declaration that based on the events that occurred on 28 March 2011 starting with the meeting with the Fourth Defendant as the Deputy Registrar of the High Court until 30 March 2011 in the auction room of the High Court of Malaya, there is no Public Auction as provided under the National Land Code 1965.

      1.12 A declaration that the Fourth Defendant having known of the existence of a local bidder on 28 March 2011 and the active involvement of the First Defendant through its agent, Mr Alan Adrian Gomez, on 30 March 2011 has ensured the Public Auction has become a private auction for the interest of the First Defendant in breach of the National Land Code 1965.

      1.13 A declaration that the Third Defendant is a fund owned by unit holders and it can only be managed by the Seventh Defendant and nonetheless the Seventh Defendant did not give instruction to any person to make an offer for the Third Defendant.

      1.14 A declaration that the Third Defendant is a fund and not a legal entity and cannot hold assets in the name of the Third Defendant itself and the Fifth Defendant did not enter the Second Defendant as a trustee for the Third Defendant or for Sunway Real Estate Investment Trust (the Third Defendant) in the register of land ownership.

      1.15 A declaration that the purchase of Putra Place by the Third Defendant through the Seventh Defendant as announced on 20 April 2011 breaches the Capital Markets and Services Act 2007 and also the Guidelines on Real Estate Investment Trust issued by the Securities Commission on 21 August 2008 and the Trust Deed dated 20 May 2010.

      1.16 A declaration that the Second Defendant is a trustee to unit holders and as a trustee it can only take instruction from its beneficiaries through procedures in the Trust Deed dated 20 May 2010, the Capital Markets and Services Act 2007 and also the Guidelines on Real Estate Investment Trust issued by the Securities Commission on 21 August 2008 and any action by the Second Defendant which breaches the law is invalid.

      1.17 A declaration that the offer made by the Second Defendant is in breach of its Articles of Association and it is not its duties under the Trust Deed dated 20 May 2010 to make an offer without the directions of the beneficiaries or unit holders of Sunway Real Estate Investment Trust.

      1.18 An order from the High Court that if the National Land Code 1965 Form 16F has been issued but not issued by the officer of the Court on whose instruction the auction was conducted in its capacity as an officer of the Court: the Certificate must be rejected.

      1.19 A declaration that the National Land Code 1965 Form 16F Certificate of Sale by the Court signed by the Fourth Defendant as an officer of the Court shows the land Lot No. 38 Seksyen 0051 Grn 10012 (Putra Place) has been sold to the Second Defendant and to the Second Defendant as a trustee of Sunway Real Estate Investment Trust which is the Third Defendant.

      1.20 A declaration that the registration of proprietorship in the registration book of the Land and Mines Office Wilayah Persekutuan Kuala Lumpur does not state that the Second Defendant is the trustee for the Third Defendant.

      1.21 A declaration that the ownership and address in the registration book of the Land and Mines Office Wilayah Persekutuan do not reflect the National Land Code 1965 Form 16F Certificate of Sale by the Court and is null and void.
          (a) And the Memorandum (Condition 8) that the purchaser is the Second Defendant.

      1.22 A declaration that the High Court cannot sanction or allow a transaction that was carried out in breach of the rules and guidelines made by Parliament to enter into the register of the Registrar of Titles Kuala Lumpur.
          (a) A declaration that the acquisition in the Trust Deed dated 20 May 2010, the Capital Markets and Services Act 2007 and the Guidelines on Real Estate Investment Trust issued by the Securities Commission on 21 August 2010 does not allow a real estate investment trust to purchase property in a public auction.
2. the following orders:
      2.1 An order that the sale to the Second Defendant and/or the Third Defendant and/or the Seventh Defendant be set aside and remitted back to the Registrar of the High Court to further proceedings as provided in Section 259(2)(c) of the National Land Code for the following reasons:-
          (a) that the sale (if any) on 30 March 2011 occurred in breach of:
              (i) National Land Code 1965;
              (ii) Capital Markets and Services Act 2007;
              (iii) Guidelines on Real Estate Investment Trust issued by the Securities Commission on 21 August 2008; and
              (iv) Trust Deed dated 20 May 2010.
      2.2 An order that all proceedings to register and issue the issue document of title for Lot No. 38 Seksyen 0051 Grn 10012 by the Second Defendant and/or the Third Defendant and/or the Fourth Defendant be prohibited by the High Court until the conclusion of the hearing on the Originating Summons and the Fifth Defendant be ordered to cancel the presentation that was made by Messrs Sree Harry & Co on 19 April 2011.
          (a) an order that the Sixth Defendant investigates the exemption given on Form 16F and request the relevant party to pay tax to the Government of Malaysia and be penalized accordingly.

          (b) If the Court is of the opinion that the auction on 30 March 2011 is in order, to declare that the Second Defendant in its capacity as a company, as the purchaser. And if the Second Defendant is declared as prayed, the Second Defendant is ordered through its directors to prove that the shareholders of the Second Defendant have approved the Second Defendant to purchase Putra Place through public auction.
      2.3 An order that any presentation made to register the Second Defendant (in any capacity) and/or the Third Defendant and/or the Fourth Defendant be thrown out and that the chargor which is Metroplex Holdings Sdn Bhd be registered again as the registered proprietor without any presentation of charge;

      2.4 Costs to be borne by the Defendants;

      2.5 Damages suffered by the Plaintiff to be assessed; and

      2.6 Any other orders as the High Court thinks fit.
The matter is fixed for hearing on 27 May 2011.
    The Second Defendant, the Third Defendant and the Seventh Defendant are seeking legal advice on the above matter.


    This announcement is dated 9 May 2011.


    Announcement Info

    Company NameSUNWAY REAL ESTATE INVESTMENT TRUST  
    Stock Name SUNREIT    
    Date Announced9 May 2011  
    CategoryGeneral Announcement
    Reference NoSR-110509-7BA7F

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