THE Monetary Authority of Singapore (MAS) on Monday ordered the removal of the manager of Eagle Hospitality Reit (EH-Reit), and to appoint a new manager "as soon as practicable".

This move closely follows the issuance of a Notice of Intention (NOI) on Oct 26, which was in view of numerous breaches of the Securities and Futures Act (SFA) by the Reit's manager EH-Reit Management, as well as serious concerns over the manager's ability to comply with rules and regulations, said MAS.

The NOI gave the Reit's trustee, DBS Trustee Limited, and the EH-Reit management an opportunity to provide reasons as to why the management should not be removed. The duo were given 10 days to respond, upon the receipt of the NOI.

MAS said that it had received written submissions from Reit managers' shareholder Mandarin West Holdings following the NOI, and had "carefully considered" these.

However, as the written submissions raised "no new material facts", MAS had proceeded to issue the direction to the trustee.

"MAS continues to have serious concerns with EH-Reit Management's ability and commitment to comply with MAS' rules and regulations, given the numerous breaches of the Securities and Futures Act, including recurrent and ongoing breaches of capital and financial requirements," said MAS.

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EH-Reit Management had breached these financial requirements for the first time in the fourth quarter of 2019, but informed MAS only in April this year.

The management also again breached the same base capital requirement on Aug 31 and Sept 30, despite directions for it to rectify breaches and take steps to enhance the monitoring of its financials.

Other breaches include not seeking MAS' approval before providing financial assistance to a subsidiary, late submissions of regulatory returns, and the failure to present to unitholders audited financial statements of EH-Reit within the stipulated timeframe.

MAS added that it will take "stern action" against any financial institution which does not comply with its rules and regulations.

Trading of EHT units was voluntarily suspended on March 24 this year, after the manager defaulted on a loan of US$341 million.