Paragraph 5 of the Property Funds Appendix also imposes a requirement for Unitholders’approval for an Interested Party Transaction by LMIR <strong>Trust</strong> which value exceeds 5.0% ofLMIR <strong>Trust</strong>’s latest audited NAV. Based on LMIR <strong>Trust</strong>’s consolidated financial statementsfor the six-month period ended 30 September 2012, the NAV of LMIR <strong>Trust</strong> was S$1,153.8million as at 30 September 2012. Accordingly, if the value of a transaction which isproposed to be entered into by LMIR <strong>Trust</strong> with an Interested Party3 is equal to or greaterthan S$57.7 million, such a transaction would be subject to Unitholders’ approval. Giventhe Pejaten Village Purchase Consideration of Rp.748.0 billion (or S$95.1 million), thevalue of the Pejaten Village Acquisition exceeds the said threshold.As at the Latest Practicable Date, the Manager has a direct interest in 62,990,115 Units(comprising 2.88% of the total number of issued Units). The Manager is wholly-owned byPeninsula, a wholly-owned subsidiary of Jesselton which is in turn a wholly-ownedsubsidiary of the Sponsor. The Sponsor, directly and/or through its subsidiaries andassociates and through its interest in the Manager, has (i) deemed interests ofapproximately 29.95% in LMIR <strong>Trust</strong> and (ii) wholly-owns the Manager, and is thereforeregarded as a “controlling unitholder” of LMIR <strong>Trust</strong>, and “controlling shareholder” ofthe Manager, under both the Listing Manual and (where applicable) the Property FundsAppendix. The Pejaten Village Vendors are indirect wholly-owned subsidiaries of theSponsor. For the purposes of Chapter 9 of the Listing Manual, each of the Pejaten VillageVendors is an Interested Person of LMIR <strong>Trust</strong>, and for the purposes of paragraph 5 of theProperty Funds Appendix relating to Interested Party Transactions, each of the PejatenVillage Vendors is an Interested Party of LMIR <strong>Trust</strong>. Similarly, TMI is an indirect whollyownedsubsidiary of the Sponsor. MPP and the Sponsor are under common control by PTMultipolar Corporation Tbk. For the purposes of Chapter 9 of the Listing Manual, each ofTMI and MPP is an Interested Person of LMIR <strong>Trust</strong>, and for the purposes of paragraph 5of the Property Funds Appendix relating to Interested Party Transactions, each of TMI andMPP is an Interested Party of LMIR <strong>Trust</strong>.Therefore, each of the Pejaten Village Acquisition and the Binjai Supermall Acquisitionwill constitute an Interested Person Transaction under Chapter 9 of the Listing Manual.The Pejaten Village Acquisition and the Binjai Supermall Acquisition will also constitutean Interested Party Transaction under paragraph 5 of the Property Funds Appendix. Thevalue of the Pejaten Village Acquisition is equal to 8.2% of LMIR <strong>Trust</strong>’s NTA/NAV ofS$1,153.8 million as at 30 September 2012. Therefore, the approval of Unitholders isrequired for the Pejaten Village Acquisition under Rule 906 of the Listing Manual andparagraph 5 of the Property Funds Appendix. Although approval of Unitholders is notrequired for the Binjai Supermall Acquisition under Rule 906 of the Listing Manual andparagraph 5 of the Property Funds Appendix, the Manager wishes to seek Unitholders’approval for the Binjai Supermall Acquisition for (i) good corporate governance and (ii)due to the fact that Unitholders’ approval is also being sought for the Pejaten VillageAcquisition. Accordingly, the approval of Unitholders is sought for each of the PejatenVillage Acquisition and the Binjai Supermall Acquisition.”Requirement for Unitholders’ approval of the Whitewash ResolutionThe following is extracted from section 6.3 of the <strong>Circular</strong> and provides an overview of why theissuance of units to the Manager in connection with the Pejaten Village Acquisition, the BinjaiSupermall Acquisition, and the Pluit Village Acquisition is being sought.A-4
“6.3. Rationale for the Whitewash ResolutionThe Whitewash Resolution is to enable the Manager to receive the Acquisition Fee Units inits own capacity, and the rationale for allowing the Manager to do so is set out as follows.Pursuant to Clause 15.2.1 of the <strong>Trust</strong> Deed, the Acquisition Fees are payable to theManager in the form of cash and/or Units (as the Manager may elect). However, theManager is required under paragraph 5.6 of the Property Funds Appendix to receive theAcquisition Fee in Units. Accordingly, without the Whitewash Resolution, and in view ofRule 14.1(a) of the Code, the Manager will not be able to receive the Acquisition Fees thatit is entitled to as it will neither be able to receive the Acquisition Fees in cash nor in Units.In that case, this may disincentivise the Manager from actively sourcing for and pursuingacquisition opportunities from Interested Parties, even if such acquisitions may bebeneficial to Unitholders.The Manager is also of the view that allowing it to receive the Acquisition Fees in Unitswill demonstrate the long-term commitment of the Manager and of the Sponsor to LMIR<strong>Trust</strong>. It will also further align the interests of the Manager with Unitholders, incentivisingthe Manager to raise the performance of LMIR <strong>Trust</strong> to the benefit of Unitholders.The Manager also wishes to note that pursuant to paragraph 5.6 of the Property FundsAppendix, the Acquisition Fee Units cannot be sold within one year from the date of theirissuance and so there is sufficient safeguard in place to prevent the Manager fromimmediately selling down the Acquisition Fee Units.”In accordance with the abovementioned requirements, which are more particularly described inthe <strong>Circular</strong>, KPMG Corporate Finance Pte Ltd (“KPMG Corporate Finance”) has beenappointed as the independent financial adviser (“IFA”) to advise:the Independent Directors of the Manager and the <strong>Trust</strong>ee as to whether the Pejaten VillageAcquisition is (a) on normal commercial terms and (b) prejudicial to the interests of LMIR<strong>Trust</strong> and the minority Unitholders;the Independent Directors of the Manager and the <strong>Trust</strong>ee as to whether the The BinjaiSupermall Acquisition is (a) on normal commercial terms and (b) prejudicial to the interestsof LMIR <strong>Trust</strong> and the minority Unitholders; andthe Independent Directors of the Manager as to whether the Whitewash Resolution is (a) onnormal commercial terms and (b) prejudicial to the interests of LMIR <strong>Trust</strong> and the minorityUnitholders,(collectively, the “Opinions”).A-5