One case involves $1.86m for contracts taking effect from 2026 and 2037

Ayra Wang

A couple who are founding directors of Physical Fitness have been arrested by customs officers after the government set up a special investigation team into the gym chain's "temporary suspension."

Luk Ngai-keung, 67, and wife Ho Yuk-wah, 68, were arrested on suspicion of wrongly accepting payments from customers in violation of the Trade Descriptions Ordinance, officers said yesterday in a joint press conference by the Customs and Excise Department and police.

"Customs found that the chain still promoted services and accepted payments for prepaid services from customers even one day before its business suspension," said Rachel Fong Kwun-ting, head of the department's unfair trade practice investigation.

Fong said the department as of noon yesterday received 900 reports involving HK$38 million, with the highest amount at HK$1.8 million.

She said the department will continue to investigate Physical Fitness' operation and financial status and cases of rent arrears in some branches.

Superintendent Eddie Chow Cheung-yau of the Commercial Crime Bureau's fraud division said police will probe if the chain had violated any regulations.

Chow said police have also received 20 reports from victims claiming losses ranging from HK$1,000 to HK$660,000.

The arrests came after the government on Tuesday announced the formation of an interdepartmental investigation team to "handle the case as soon as possible."

The Consumer Council also received more than 2,400 complaints involving financial losses of HK$86 million as of 6pm yesterday.

Council chief executive Gilly Wong Fung-han said on a radio program that the victim in the largest case spent HK$1.86 million for purchasing more than 1,900 lessons.

The victim signed two new contracts this year after alleged lobbying by the fitness center, including a 10-year contract that will only take effect from 2026 and a three-year contract that will take effect from 2037, Wong said.

She said the victim bought a 10-year membership in 2016.

"This is outrageous. It is unreasonable and inappropriate to ask customers to sign a contract that will not take effect until 13 years later," Wong said.

MTR Corp is also suing Physical Fitness for owing nearly HK$6.74 million in rent and utilities for its branch in CityLink Plaza in Sha Tin and seeks to repossess two of its units.

MTR said in a High Court writ on Tuesday that the chain had failed to pay rent and fees such as management fees, air-conditioning fees and government rates for its Sha Tin branch since June and closed down without notifying the company in advance.

Hong Kong Federation of Trade Unions yesterday sent a letter to the chair of the Legislative Council's panel on economic development, Regina Ip Lau Suk-yee, and the chair of the panel on manpower, Lam Chun-sing, urging a joint meeting to discuss the issue.

Lam said the panel will consider discussing the case from policy-making perspectives, such as regulating the industry and protecting consumer and staff rights, but said the meeting will not be held in the short term.

Physical Fitness abruptly closed all its 23 branches on Friday before announcing a day later on Saturday that it would reopen its Wan Chai branch under a new name - Healthy - funded by a new investor.

ayra.wang@singtaonewscorp.com