Harvey Nichols buyer asks for a refund from Burton

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The Independent Online
THE Hong Kong entrepreneur who bought the Harvey Nichols department store from Burton Group last August thinks he paid too much for it and is now demanding some of the pounds 60m purchase price back.

Dickson Poon, the controlling shareholder of the Hong Kong luxury goods group Dickson Concepts, is in dispute with Burton over the value of Harvey Nichols' assets. It is accusing the UK retailer and its auditors, Price Waterhouse, of depreciating them too slowly.

Lawyers and accountants for the two sides have failed to agree, despite a writ issued earlier this year by Dickson Concepts. Now the issue has been referred to an independent third party, believed to be Arthur Andersen, for arbitration.

Joseph Wan, the finance director of Dickson Concepts, who was in London last week, stressed the argument was over 'the final adjustment, not the total price'. There is no question of the deal being reversed.

The disputed sum was 'a very small proportion of the total', said Mr Wan. The company had issued a writ, he confirmed, but it had been set aside for the moment. He expected the matter to be resolved very shortly.

The uncertainty is a further setback for Burton, whose shares have plunged in recent weeks as hopes of a recovery on the high street slip further away. At 31 1/2 p on Friday, they hit their lowest point this year.

The proceeds of the HN sale, together with the pounds 161m rights issue last year, helped Burton reduce its heavy borrowings. These are now growing again and are forecast to reach about pounds 400m by the August year-end.

In the transaction, Dickson Concepts paid pounds 44.6m for the equity, repaying pounds 9m of inter- company debt and assuming another pounds 6m of HN debt.

The store was performing 'according to expectations', Mr Wan said. There are plans to open a Harvey Nichols boutique in Hong Kong this winter.

Mr Wan said that according to his records, HN had filed its accounts for the year to September 1991. However, there is no sign of them at Companies House.

(Photograph omitted)