David Webb slams retailer Bauhaus for splurging on flat, not paying dividend

David Webb, a Hong Kong corporate governance activist who is battling terminal cancer, issued an open letter criticising Hong Kong fashion retailer Bauhaus International Holdings’ decision to buy a residential property instead of making a dividend payout.

Webb holds more than 8 per cent of the company’s shares and is the second-largest shareholder after the chairman, Winnie Tong She-man, who controls 58.9 per cent, according to a recent Hong Kong public filing.

The open letter, published on Wednesday on his platform Webb-site.com, referred to Bauhaus’ purchase agreement for a residential flat in Kowloon’s Laguna City at a price of HK$8.32 million (US$1.07 million), according to a filing on September 5. Bauhaus issued another statement on Tuesday, raising the purchase price to HK$8.35 million.

The filing said an initial deposit of HK$250,000 was paid and the formal sale and purchase agreement would be signed on September 19. It added that the property would be used as staff quarters for the company.

“I urge you to stop right now, even though that probably means forfeiting the deposit,” Webb said in his letter.

Bauhaus did not immediately respond to a request for comment.

At March 31, Bauhaus had net cash of HK$97.1 million, accounting for 55 per cent of its net tangible assets of HK$175.7 million. Bauhaus reported a profit of HK$11.7 million for the year that ended on March 31 but did not pay a dividend, Webb said, and it has not done so in nearly three years.