Hong Kong customs arrests boss of failed bakery chain Crostini after customers complain they cannot get refunds for gift vouchers, cake coupons

Customs officers have arrested the boss of Hong Kong bakery chain Crostini, which abruptly closed all 15 of its outlets, after receiving complaints from disgruntled customers who failed to get refunds for thousands of cake coupons and gift vouchers worth HK$270,000 (US$34,000) in total.

The arrest on Thursday of Crostini director and founder Wong Kwong-fai on suspicion of wrongly accepting payments came nine days after the 15 retail stores closed without warning. The businessman has been granted bail pending further investigations.

The Customs and Excise Department revealed that it had received 104 complaints regarding the chain, involving 5,300 prepaid cake coupons or gift vouchers amounting to about HK$270,000. One complainant had paid as much as HK$17,500. Many were unable to redeem the products or receive any refunds after the closure.

Wong, speaking to the press before his arrest, attributed the abrupt closure to the end of a Covid-related government scheme in July that allowed local businesses to delay rental payments for up to three months.

He said that when landlords started chasing him for payments in August, cash flow problems left him with no choice even after he had injected HK$80 million into the chain from funds of his own and his friends amid a Covid-19 epidemic that had caused his business to plummet by two-thirds.

Lui Ngai-kuen, deputy head of customs’ trade descriptions investigation bureau, said Wong’s explanation would be regarded as evidence during the investigation.

“We will consider an individual’s explanation, which he might see as helpful to himself. But we will not say whether he has violated the law before a comprehensive investigation,” Lui said on Thursday.