The sudden closure of gym chain Physical Health Centre had prompted over 3,000 complaints as of Wednesday night, involving payments of more than HK$86 million ($11 million), and two directors of the fitness company have been arrested by the Customs and Excise Department.
Hong Kong’s consumer watchdog said it had received 2,429 related complaints as of Wednesday afternoon with a total amount of HK$86.4 million. The biggest case involved over HK$1.8 million.
Customs and Excise and the Hong Kong Police Force held a joint news conference on Wednesday afternoon to brief on the investigation’s progress into the gym closure.
Customs revealed that it arrested two directors of the now-defunct gym chain — Luk Ngai-keung, 67 and his 68-year-old wife Ho Yuk-wah. They will be released on bail pending further questioning and investigation, Customs said.
By Wednesday noon, Customs had received over 900 complaints relating to the case, which involves prepaid fees exceeding HK$38 million.
READ MORE: Physical Fitness patron complaints involve HK$19m, says watchdog
Follow-up investigation will focus on the company’s operation and financial situation, as well as whether it conducted any unusual sales activities, said Customs.
Police confirmed that it had received 20 reports from the public, involving the gym chain’s membership, private coach training, and beauty services, with losses ranging from HK$2,000 to HK$660,000.
A preliminary investigation conducted by Customs had revealed that the company continued to sell fitness and beauty products to consumers and accept prepaid fees from clients on Sept 5, the day before its closure, which Customs believes could potentially violate the Trade Descriptions Ordinance.
MTR Corp, the city’s sole rail operator, sued the gym on Tuesday for allegedly falling to pay more than HK$6.73 million in rent and miscellaneous charges.
The public transport network said Physical’s branch in Sha Tin, located at MTR-owned Citylink Plaza, has not paid monthly rent and other expenses since June. The branch reportedly closed on Sep 6 without MTR’s consent – a breach of the tenancy agreement.
MTR has demanded that the gym chain settle the outstanding rent, vacate the premise and pay restitution for the breach of its lease agreement.
The Hong Kong Special Administrative Region government established a dedicated interdepartmental investigation team comprising Customs and police on Tuesday to look into related disputes and potential crimes.
On Friday, the 38-year-old gym chain unexpectedly ceased operation at all of its all 23 outlets in Hong Kong, leaving customers and employees in limbo.
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Gilly Wong Fung-han, chief executive of the Consumer Council, told a radio program on Tuesday that one woman had paid the company HK$1.8 million for 1,900 personal training classes in boxing, stretching and weightlifting, and had signed three membership contracts with Physical — including one scheduled to start in 2037.
The woman had been a customer of the company since 2016, and was easily persuaded to renew the contracts due to her trust in the gym chain, said Wong.
According to information on Physical’s website, the company operated in Hong Kong for 38 years, offering fitness, yoga, and beauty care courses and services to over 500,000 customers.
Contact the writer at stephyzhang@chinadailyhk.com
