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Sun, Oct 03, 2010
The New Paper
13 arrested in HK yoga chain fraud

THEY were caught by surprise when three yoga chains in Hong Kong closed without warning earlier this year.

The closures had left the hundreds of customers high and dry to a tune of about HK$8 million (S$1.4 million).

So they were happy to hear that 13 former directors and staff members of the chains were arrested on Wednesday on suspicion of conspiracy to defraud.

Apple Daily reported that plain-clothes officers from the commercial crime bureau raided eight companies and 13 other locations in a massive lunchtime operation.

The 10 men and three women arrested, aged 23 to 47, were former directors and senior management- level employees of three yoga schools - Yoga Yoga International, Planet Yoga and Beauty Yoga.

Twelve of them were released on police bail and told to report back to the police in late November. The thirteenth, a 40-year-old man arrested later on Wednesday afternoon, was still in custody.

Investigators were seen carting away boxes of documents, including membership records and staff agreements, from an office in Ginza Square in Yau Ma Tei.

Investigators said they will look into the overall operations of the yoga companies and their financial records.

Yoga Yoga International, based in Causeway Bay, closed at the end of March, while Planet Yoga - which had three outlets and 13,000 members- closed in May.

Beauty Yoga closed suddenly in August, leaving more than 800 members in the lurch.

Hundreds of yoga students, who were persuaded to buy memberships, join yoga lessons or pay for facial treatment, complained to police after the closures.

Police said in a statement on Wednesday: "Up to Tuesday, police had received 794 complaints in which approximately HK$8 million was involved."

Ms Cynthia Tang told South China Morning Post that she was happy with the arrests.

"I appreciate their action. It's only the first step after a long wait."

Persuaded to join

Members of the chains had provided accounts of the closures last month, detailing how they were persuaded to join as new members or renew their membership days before the yoga companies closed, she said.

She added that Planet Yoga members suspected Yoga Yoga and Planet Yoga had been related.

When Yoga Yoga closed, the company told its members that they could join Planet Yoga at a discounted rate. The two companies also appointed the same liquidator, Ms Tang said.

To date, only a quarter of the Plant Yoga victims have recovered from banks the cash they had paid the yoga company.

Ms Rebecca Leung paid HK$10,388 to join Yoga Yoga's Tsuen Wan branch, which never opened.

"It was only when the company closed that I knew it had tricked me," she said.

While she has secured a full repayment from the bank, she hopes the police action would help those still fighting to get their money back.

 

This article was first published in The New Paper.

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