Hong Kong activist investor David Webb has urged Bauhaus International (0483) to abandon plans to purchase an HK$8.32 million residential flat for staff use, arguing that the move misuses company funds and undermines shareholder value.
In an open letter to the board, Webb — who owns more than 8 percent of Bauhaus and is the second-largest shareholder after chairwoman Winnie Tong She-man with a 58.9 percent stake — said the company should cancel the purchase even if it means forfeiting the HK$250,000 deposit already paid. The transaction is due to be formalized on September 19.
Webb noted that Bauhaus held HK$97.1 million in net cash at the end of March, equal to 55 percent of its net tangible assets, but has not paid a dividend since September 2022 despite posting a HK$11.7 million profit in the year ended March.
“The company does not need to retain that much cash for the business,” the letter said, contrasting current policy with that of former chairman George Wong Yui-lam, who delivered value for all shareholders by selling off office and warehouse premises.
Webb also questioned the board’s explanation that the flat would improve staff benefits, arguing that a rental allowance would be more effective. The letter further criticized the company for not disclosing same-store sales figures for the June quarter, calling the omission a setback for transparency.
