In wake of store closures, California Fitness staff stage protest march to Hong Kong police headquarters
Trade unions estimate HK$1 billion in consumer losses and HK$10 million in overdue wages
Hong Kong’s troubled California Fitness chain closed all its branches yesterday, as dozens of staff filed a formal complaint at police headquarters about funds being illegally transferred out of the company.
The city’s consumer watchdog also scrambled to advise gym goers on minimising their losses – an estimated 100,000 members have been left in limbo.
Led by pro-establishment lawmaker Bill Tang Ka-piu, around 30 of the chain’s 500 unpaid employees marched to police headquarters in Wan Chai yesterday to accuse owners of financial irregularities at JV Fitness, operator of California Fitness, mYoga and Leap.
Trade unions estimated that consumer losses could top HK$1 billion while overdue wages exceeded HK$10 million.
The Consumer Council urged customers to contact their banks for possible refunds and termination of further auto-payments.
The watchdog advised JV Fitness and landlords of premises rented by the company to make arrangements for customers to retrieve their personal belongings, which have been locked in the city’s 12 closed outlets.
The sudden city-wide closure of California Fitness and its sister gym centres, effective today, came after internal announcements were circulated among staff on Monday night, informing them that the chain’s assets had been frozen pending a winding-up petition.
The first court hearing for the petition, originally scheduled for August 31, has been brought forward to this morning, with a liquidator expected to be appointed.
It is also understood that the Customs and Excise Department has set up a special investigative unit to deal with rising complaints. Those involving refunds would be referred to the likes of the Consumer Council, a source said.
Lawmaker Tang, from the Federation of Trade Unions, who has been helping the troubled gym chain’s employees, said he had received multiple reports from senior JV Fitness staff that the company was not as cash-strapped as it seemed.
Sales quotas were regularly met, and calculations based on rents and rates revealed in recent legal documents suggested expenditure was offset by revenue over the past year, he said.
JV Fitness, which is struggling to cough up at least HK$14.1 million for mostly rent arrears, is facing a winding-up petition, filed by former director Wong Ping-kuen via his company, BeSpark Technologies Engineering.
Wong recently denied being the owner in a recent Next magazine interview. He confirmed a Post report that he and his wife, Chan Wai-man, also a former director, had been investigated by customs officers earlier. Wong cited that as one of the reasons he had decided to stop pumping money into the company.
The Post also revealed earlier that local Muay Thai fighter Bryan To Hang-lam could be a potential white knight, but in the interview, Wong said To had not made any buying offer.
The Consumer Council advised gym goers to carefully revisit valid contracts signed with JV Fitness, and approach banks to suspend auto-payments.
Lawyer Daniel Wong Kwok-tung said employees, some of whom had been kept in the dark, were likely to get their back wages, but chances of customers securing refund were slim.
