Business magnate Poon to fight insider trading charge

Staff reporter

Business magnate Dickson Poon and his luxury goods retailer Dickson Concepts have denied allegations of insider trading and breach of disclosure requirements brought against them by the Securities and Futures Commission.

The securities watchdog said Dickson Concepts gained nearly HK$1 billion from a 2019 deal but did not reveal that chairman Dickson Poon had raised his stake in the company as required.

The retailer's shares then jumped by a third following the disclosure of the deal.

The SFC said it has initiated proceedings in the market misconduct tribunal against Dickson Poon and his family-owned company Equity Advantage for alleged insider trading in shares of Dickson Concepts.

It noted that Dickson and son Pearson Poon, an executive director of Dickson Concepts, deliberately breached disclosure requirements, leading to a seven-week delay in the firm releasing inside information.

In response, Dickson Concepts denied the allegations, adding it is seeking legal advice and will make further announcements when required, according to a filing to the Hong Kong bourse.

It said both Dickson and Pearson Poon also strongly deny the claims and intend to vigorously contest the proceedings.

At the center of the allegations is the acquisition of Honey Science Corporation by PayPal, which was announced on the payment giant's website on November 20, 2019, for about US$4 billion (HK$31.2 billion). At the time, Dickson Concepts owned 24.8 million shares of Honey, or 3.73 percent of the issued share capital.

However, the investment was listed in Dickson Concepts' financial statements under "unlisted equity securities" without any mention of Honey.

On January 9, 2020, Dickson Concepts announced that the PayPal-Honey acquisition had been completed on January 3 and that it would receive US$147.6 million in cash, resulting in a gain of HK$928.7 million over the net book value of its investment as of September 2019.

The following day, the share price of Dickson Concepts soared to HK$5.52 before ending at 33 percent higher at HK$5 per share.

The SFC alleges that Dickson Poon, while in possession of insider information about the acquisition, purchased 2.76 million shares of Dickson Concepts through Equity Advantage between November 28 and December 19, 2019.

Additionally, the SFC claims that Dickson Concepts failed to disclose this inside information promptly, and that Dickson and Pearson Poon were responsible for the delay, as they became aware of the acquisition on November 21, 2019, but did not take action to inform the board or the public until January 9, 2020.

Under the Securities and Futures Ordinance, insider trading and other forms of market misconduct are handled as civil cases by the tribunal, which can impose sanctions such as profit disgorgement and disqualification from corporate directorships.

Founded by Dickson Poon in 1980, Dickson Concepts is well-known for introducing luxury brands such as Harvey Nichols and ST Dupont to the Asian market.

Poon's influence extends beyond the luxury retail sector to the film world as he cofounded D&B Films in 1984, a production company that became famous for its martial arts films, including the popular In the Line of Duty series.

Pearson Poon is the son of his third and current wife, Pearl Yu Kwai-chu.

His two former wives are Esquel Group chairwoman Marjorie Yang Mun-tak and Oscar-winning actress Michelle Yeoh Choo Kheng.

Dickson Poon's brother-in-law is Bank of East Asia chairman David Li Kwok-po.