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Clifford Lo

Hong Kong authorities have arrested two directors of the 38-year-old Physical gym chain, sources have said, after a watchdog received more than 2,400 complaints involving nearly HK$87 million (US$11.2 million) against the operator for failing to deliver prepaid services.
The Post learned that Luk Ngai-keung, 67, was taken into custody after surrendering to customs, while his 68-year-old wife, Ho Yuk-wah, was apprehended after officers raided her home on Wednesday morning.
A citywide manhunt was also launched for other suspects involved in the case.
An insider said Luk surrendered himself at the North Point headquarters of the Customs and Excise Department, which enforces the Trade Descriptions Ordinance, on Tuesday afternoon. He was accompanied by his lawyer.
The directors of the recently closed gym chain were detained for allegedly having no intention of supplying services after accepting payments from customers – an offence punishable by up to five years in prison and a HK$500,000 fine.
“This is in violation of the Trade Descriptions Ordinance under the wrongly accepting payment section,” the source said.
The Consumer Council also revealed the amount involved in complaints had reached HK$86.4 million as of Wednesday evening.
The watchdog has logged 2,429 complaints from Physical customers so far. The average amount involved in each claim is HK$35,577.
It also revealed that the biggest case involved a contract which would only take effect in 2037, with payment for more than 1,900 private classes and membership, amounting to HK$1.86 million in total.
Superintendent Rachel Fong Kwun-ting of customs’ intellectual property investigation bureau confirmed the two directors had been arrested.
“We found that the day before closing, the company was still selling fitness and beauty services and accepting prepaid payments from customers, which is a suspected violation of the Trade Descriptions Ordinance.”
Fong also revealed that rent had gone unpaid for some of the chain’s branches.
“We will continue investigating the operations and financial situation of the company before closure, as well as whether there were any abnormal sales of services,” she said.
Luk was released on bail on Wednesday afternoon pending further investigation, while his wife was still being held for questioning in the evening.
The couple serve as directors of at least three Physical-related companies that ran fitness and beauty centres across the city before the gym chain announced the closure of its 19 branches last Friday.
The department said it had received about 900 complaints from consumers over their prepaid fitness and beauty services involving HK$38 million.
Officers had contacted more than 500 of the complainants over the past four days, Fong said.
Superintendent Eddie Chow Cheung-yau of police’s commercial crime bureau said officers would follow up on this case by conducting a criminal investigation.

The force has received 20 complaints in connection with the company’s closure.
Authorities made the arrests hours after the government announced it had set up an interdepartmental investigation team to handle related cases.
A fitness coach, who asked to be identified by his surname Fung, said earlier that his supervisor sent mass messages to staff on September 1 asking them to sell packages priced at more than HK$30,000 to new customers.
Those who made successful sales were told they would receive a HK$1,000 bonus, he said, accusing the chain of “scamming customers”.
It sparked concerns about why the chain was still selling prepaid services despite knowing they would not be able to provide them.
The government said on Tuesday night that the interdepartmental team would conduct an investigation into the alleged offences under the Trade Descriptions Ordinance and whether other suspected crimes had taken place.
Consumer Council chief executive Gilly Wong Fung-han called on Physical to disclose details of its reopening plan, as the watchdog was still unable to contact its new management after the chain announced on Saturday that a Wan Chai branch would reopen under another brand called Healthy.
“The council could not reach the management team of the new brand,” she told a radio programme, adding that they had managed to contact a customer service manager from Healthy who could only provide limited details.

Wong said the biggest claim made to the watchdog involved HK$1.86 million, which covered various plans including 1,916 fitness classes and a 10-year membership.
“Some of the prepaid contracts were set to begin after 2024, and one of them will start from 2037,” she said, adding that the customer started the membership in 2016.
Wong said that it was unreasonable for the company to offer such long-term prepaid contracts. Among all complaints, 73 were from elderly residents aged over 65, with the largest claim involving about HK$300,000, she said.
The largest claim involving the chain’s beauty services was about HK$600,000, with half of the amount linked to unredeemed services.
“Some of the consumers might not be aware that they have signed so many contracts,” she said.
The Mandatory Provident Fund Schemes Authority said Physical owed about HK$4.8 million in outstanding payments for June to August for 740 employees.
The pension regulator said it would first file a civil claim in the High Court next week to recover the outstanding payments for June and July. For August, it was following up on the affected employees’ information.
Additional reporting by Oscar Liu, Vivian Au and Danny Mok


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Crime in Hong Kong

2 Physical gym directors held after Hong Kong watchdog logs 2,429 cases involving HK$87 million

A director of Hong Kong gym chain Physical was released on bail after surrendering to customs. Photo: Sam Tsang

Luk Ngai-keung, a director of the Physical gym chain, is escorted by customs officers. Photo: Sam Tsang

The fitness chain is at the centre of 1,725 complaints filed with the city’s consumer watchdog. Photo: Sam Tsang

Hong Kong authorities set up interdepartmental team to investigate closure of Physical gym chain

There was no indication that a Wan Chai branch Physical said would be reopened under a new name was operational on Tuesday. Photo: Sam Tsang

Lawmaker Doreen Kong says Hong Kong must look to emulate laws used in other jurisdictions, such as New South Wales in Australia, to better protect consumers. Photo: Edmond So

Ex-employees file police reports against Hong Kong’s Physical gym as complaints balloon

Hong Kong customs has posted notices outside Physical Health Centre’s Wan Chai branch. Photo: Elson Li

Four fitness trainers formerly employed by Physical Health Centre head to Tsim Sha Tsui Police Station alongside community officer Leung Chun-kit (centre) of the Business and Professionals Alliance for Hong Kong. Photo: Jelly Tse

News

Hong Kong

Law and Crime

Customs confirm gym chain director Luk Ngai-keung earlier surrendered to authorities, with wife Ho Yuk-wah apprehended by officers


Customs confirm gym chain director Luk Ngai-keung earlier surrendered to authorities, with wife Ho Yuk-wah apprehended by officers.


Hong Kong society

Consumers