Taiwanese police raid fitness chain

PUBLISHED : Wednesday, 12 December, 2007, 12:00am
UPDATED : Wednesday, 12 December, 2007, 12:00am

Investigators have raided Taiwan's biggest health club chain after it abruptly announced it was closing due to financial troubles.

Leading the investigators, prosecutor Huang Mao-hsin searched the headquarters and three major branch offices of the Alexander Health Club Group yesterday for evidence of wrongdoing. 'We are investigating whether the group is involved in fraud,' Mr Huang said.

He said the district prosecutor's office would summon group chairwoman Candy Tang Ya-chun and sister Tang Hsin-ju for questioning.

The closure of the health club, the biggest in Southeast Asia with a membership of more than 110,000 on the island and on the mainland, caught members off guard.

A weeping Ms Tang begged for forgiveness from members and the group's 2,000-plus employees. She told a press conference she had to close because it had been continuously losing money. The group provides high-class spa, skin-care and restaurant services in addition to its regular fitness service.

Started in 1993, the group has expanded to the mainland, but Ms Tang said she had already sold her mainland business to concentrate on the operation in Taiwan. She said the group's annual revenue had slid to NT$80 million (HK$19.29 million) from NT$250 million two years ago.

But prosecutors suspected fraud was involved as the group had continued to recruit new members the day before it closed.

Newly recruited and existing members who had paid to join or renew their memberships were seeking help from consumers' rights groups.

The group charged at least NT$45,000 for a four-year membership.