Youth Camp offered NT$30m loan

More than 500 employees of the debt-ridden Youth Camp Health Group (佳姿健康集團) might be able to collect months of unpaid salaries after a friend of company chairwoman Pure Tsai (蔡純真) promised to extend a helping hand, the company said yesterday.

"The businessperson, who is a good friend of Tsai, will lend cash of NT$30 million [nearly US$1 million] to help pay back employee salaries, but he demanded to remain anonymous," Youth Camp acting spokesman Andy Wu (吳恩文) told reporters.

The company's latest decision came one day after 22 disappointed employees filed a complaint with Taipei City Government's Department of Labor, protesting Youth Camp's disregard for their labor rights.

Some staff have been forced to use high-interest-rate cash-advance cards to pay back credit card payments and make ends meet, employees said on Wednesday.

As the company's debt currently stands at NT$1.3 billion, Wu said Tsai was eager to hold talks with potential buyers to bail out the 29-year-old company, and cooperation schemes are expected to be released in the next two days.

"Youth Camp so far has no plans to announce bankruptcy," he added.

The nation's first fitness center chain, founded in 1977, abruptly suspended business Tuesday at all its outlets except the premium Taipei 101 Oxy Gym, citing a financial crisis.

The company's main rival, Alexander Health Club (亞力山大俱樂部), expressed willingness to conditionally accept Youth Camp's members, but stressed it must first gain Tsai's approval before entering into detailed discussions.

Alexander's chairwoman, Candy Tang (唐雅君), was previously a dance instructor at Youth Camp.

At a time when Tsai is seeking investors, Youth Camp is offering two options for members who do not want to switch to its Taipei 101 Oxy Gym -- either exchange their unused membership fees for cosmetics, or sign an agreement to postpone their membership for a year.

With Youth Camp insisting it won't offer reimbursements, the Consumers' Foundation (消基會) yesterday said it does not rule out the possibility of lodging a lawsuit to claim over NT$100 million on behalf of the firm's members.

In addition, some members have complained that they have been paying their membership fees through installment payments using credit cards or small-amount bank loans, and although Youth Camp is not offering services any more, they are still being required to pay a monthly fee.

Jason Lee (李鳳翱), chairman of the Consumers' Foundation, said banking institutions involved in the Youth Camp case should take responsibility to compensate consumers for their losses, as "the banks failed to conduct a detailed credit assessment at the contracted store [Youth Camp]."

He urged the Cabinet-level Financial Supervisory Commission to study the case and require Far Eastern International Bank (遠東商銀), the provider of small loans to Youth Camp members, and the Hongkong and Shanghai Banking Corp (HSBC, 匯豐銀行), the acquirer bank, to make up for the losses.

HSBC in a press release yesterday said it is currently reviewing its position. The bank said client confidentiality was important to the case and it is working to find address the situation.