Hong Kong authorities arrest Crostini manager after retail stores suddenly shut down

Hong Kong Customs has arrested the manager of local bakery chain Crostini on suspicion of wrongfully accepting payment when selling cake coupons or gift vouchers in violation of the order on commercial descriptions (TDO). It comes after Crostini suddenly halted operations at all of its retail stores on September 13, which reportedly led to some consumers asking for refunds of prepaid cake coupons.

According to its press release, Customs said it was paying close attention to the incident and called on members of the public affected by the incident to provide information. On September 22, customs said it had received a total of 104 complaints about the bakery chain, involving 5,300 cake coupons or gift certificates worth around $270,000.

After investigation, it was revealed that customers who purchased cake coupons or gift vouchers were unable to exchange the affected products or receive any refund of payments after the bakery chain suddenly announced that it had suspended its activity. The customs officers therefore arrested today a 55-year-old man, director of the bakery chain.

The investigation is ongoing and the arrested man has been released on bail pending further investigation, Customs said. He also reminded traders to comply with TDO requirements. Consumers are also reminded to obtain cake coupons or gift certificates from reputable stores and think carefully before making consumption decisions with prepayment.

Under the TDO, any trader commits an offense if, at the time of accepting payment, the trader intends not to supply the product or intends to supply a substantially different product, or if he does not there are no reasonable grounds to believe that the trader will be able to supply the product within a specified or reasonable time. The maximum penalty if convicted is a $500,000 fine and five years in prison.

Previously, Crostini faced criticism after suddenly halting operations at all of its retail stores on September 13. This has led some consumers to seek refunds for prepaid cake coupons. According to his Facebook post on September 13, Crostini said that due to the difficult business environment of the pandemic, the company had to make the decision to cease operations for all of its outlets from September 13. He also said he “tried in vain to reverse the trend”.

Wong Kwong Fai, the founder of Crostini, told local media that landlords had started chasing him for payment after the government’s rent deferral mechanism, which allows local businesses to delay rent payments until three months. He added that he had taken out loans to repay staff salaries and that the company was looking for new investors but the lack of cash made it difficult to pay rents for physical stores.

Wong also explained that the drop in sales under the pandemic is the main reason for the shutdown.

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