True Group successfully sues former CEO for misleading members

True Group, parent company of True Fitness and True Yoga, has come out successful in its lawsuit against its former group CEO Patrick Wee, for mismanaging closure of operations in Malaysia and Thailand. Its Singapore based entities, True Yoga, True Fitness (STC), and True Fitness sued Wee for breaching contractual duties under the employment contract.

According to the lawsuit, Wee had let the group publicise and sell long-term memberships despite knowing that True Group (Malaysia) was in financial straits and facing impending closure months in advance. He also allowed for pre-sales for a new club, where 50 memberships were signed up, only to be closed down soon after. Wee was also charged with misleading members that the club was closed for renovations when it was actually under a writ of seizure where inventory was being taken. Moreover, staff were also not informed about the closure until a day before, reported Yahoo! News. A similar situation had occurred with its Thailand operations where Wee enabled for sales of long-term memberships, and members were not told of closures until the day of closure.

According to reports on Channel News Asia, the judge also stated that Wee named the wife of his friend's tailor to be sole director and his "scapegoat" post the closure to deal with the aftermath and creditors. The judge also noted that Wee was more concerned with evading responsibility rather than dealing with the consequences of the closures.

Many other fitness centres have also had financial difficulties in sustaining mega clubs. Most recently, fitness centre brand Fitness First had begun its liquidation process after exhausting every way to maintain its business operations in Hong Kong.  Meanwhile, in 2016, following the announcement of it shutting is Raffles joint, California Fitness had announced that the Bugis and Novena branches saw the same fate. It came following the brand shutting its clubs across China and Hong Kong. 

Related articles:
True fitness group wins lawsuit against founder and ex-CEO over closures
Fitness First Hong Kong begins liquidation process as it bids farewell to consumers
California Fitness brand exits Singapore