• Fri
  • Apr 18, 2014
  • Updated: 9:45pm

Privatisations pay off but not for minority shareholders

PUBLISHED : Friday, 20 September, 2002, 12:00am
UPDATED : Friday, 20 September, 2002, 12:00am

The chairman of luxury retailer Dickson Concepts (International) Dickson Poon has not given his minority investors many luxurious times.


His offer to buy out the 49.9 per cent of trend-setting department store Harvey Nichols he does not own could be the latest demonstration of how Mr Poon spins profits out of privatised assets.


The offer also adds to a portfolio of controversial deals struck by Mr Poon in the past three years. They include his HK$1.52 billion acquisition of a bag of quality non-Asia assets from Dickson Concepts, the subsequent sale of a privatised real estate venture in London for a hefty profit and a HK$130-million consultant fee charged to Dickson Concepts for e-commerce consultancy services.


The Harvey Nichols offer opens a new chapter of the HK$1.52-billion acquisition saga which began in 1999.


Part of that saw Mr Poon buy the freehold of Harvey Nichols' flagship store in London's Knightsbridge for HK$605.5 million and 50.1 per cent of Harvey Nichols for HK$607.2 million.


Just a year after the deal was completed, the acquisition effectively turned into a profit-spinner for Mr Poon. He sold the freehold at a price reportedly 'far more than HK$850 million' to property investor Cadogan Estate.


How much Mr Poon earned out of the whole acquisition is uncertain. However, he only paid about HK$600 million of his own for the HK$1.52 billion deal with the help of a HK$950 million dividend he received as part of the whole process.


In 2000, the dotcom fervour put Mr Poon back in the spotlight. Dickson Concepts came under fire for failing to disclose a HK$130-million consultancy contract awarded to Mr Poon's privately owned and Dickson Management Consultancy. Its job was to design and develop a 7,000 square foot cyber shopping mall in Kowloon station, an e-commerce project for the listed company.


In addition, Dickson Concepts was obliged to buy hardware and software from Dickson Management's recommended suppliers for HK$110 million.


The contract came to light in July 2000 when the securities watchdog discussed the listing application of Dickson Cyber Concepts.


Mr Poon then defended the contract by saying it represented the best solution for shareholders, because it would cap expenditure and avoid overruns.


Haemorrhaging losses, the Dickson CyberExpress shopping mall has recently become an outlet for past-season stock.


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