Dasin Retail Trust subsidiary warned of legal action over unauthorised loan repayment
Dasin Retail Trust's subsidiary, Zhongshan Yuanxin Commercial Property Management Co Ltd (ZYCPM), has been warned by Malayan Banking Berhad of potential legal action due to unauthorized loan repayments. The bank's letter highlights serious breaches of financing terms, including a repayment of $26.87 million that reduced outstanding Onshore Loans below the required minimum. The letter demands full repayment of offshore liabilities within five days, or legal proceedings may commence. This situation follows previous announcements regarding severe breaches of internal controls by ZYCPM's PRC subsidiaries.
The offshore facility agent flagged breaches of financing terms in letter to ZYCPM.
Zhongshan Yuanxin Commercial Property Management Co Ltd (ZYCPM), a subsidiary of Dasin Retail Trust, has received a letter from Malayan Banking Berhad, Singapore Branch, warning of potential legal action over an unauthorised loan repayment.
In a letter dated 1 August 2025, Malayan Banking, acting as the Offshore Facility Agent for the trust’s IPO Offshore Facility, that ZYCPM had requested to, amongst others, make full repayment of the outstanding Onshore Liabilities and to discharge the relevant security that is the subject of the Intercreditor Deed (ICD) and that ZYCPM had made repayment of $26.87m (RMB150) on the outstanding Onshore Liabilities around mid-June 2025, causing the amount of outstanding Onshore Loans to fall below $62.71m (RMB350m),
The letter said that this constitutes 'serious breaches' of clause 5.1 of the ICD, which requires ZYCPM to maintain Onshore Loans of at least RMB350 million until the Offshore Discharge Date.
“It is evident that the parties intended for the Offshore Liabilities (as defined in the ICD) to be repaid at the same time or before the Onshore Liabilities are fully repaid,” the letter stated.
Another clause stating that payments which are permitted to be utilised pursuant to Clause 19.38 of the IPO Onshore Facility Agreement should not be used to pay Onshore Liabilities. This recognises that such monies should not be utilised to discharge the Onshore Liabilities ahead of the Offshore Liabilities.
Clause 19.38 of the IPO Onshore Facility Agreement also requires ZYCPM to remit funds
to the Trustee-Manager to enable the Trustee-Manager to repay the Offshore
Liabilities.
“Given that the Offshore Loans (as defined in the ICD) are currently due and outstanding, any available funds generated by the relevant properties that ZYCPM should be transferred to the Trustee-Manager (or other relevant entity) to repay the outstanding Offshore Liabilities,” the letter said.
The letter stated that unless full repayment of the offshore liabilities is received within five days, the agent may take action under the security documents, including commencing legal proceedings without further notice.
ZYCPM’s legal representative and executive director is Zhang Zhongming, the nephew of former Trustee-Manager director Zhang Zhencheng.
The Trustee-Manager had earlier announced on 23 June 2025 that certain unauthorised actions by PRC subsidiaries were severe breaches of internal controls and contractual obligations, putting the trust’s assets and restructuring efforts at risk.
