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Tuesday, August 11, 2015, 08:19

DSC pair arrested over fraud

By Shadow Li in Hong Kong
DSC pair arrested over fraud
A DSC store in North Point is seen closed and shuttered on Aug 3, 2015. (ROY LIU / CHINA DAILY)

Police on Monday arrested Hui Ming-shun, the founder of local furniture and home appliances retail chain DSC, and his wife on the charge of conspiracy to defraud — after the retailer abruptly closed down its 14 outlets citywide last week.

The swift arrest of Hui, 61, and Lin Wai-yin, 55, was made by the Commercial Crime Bureau at the Hong Kong Macau Ferry Terminal on Monday afternoon, less than a week after police issued the arrest warrants, a source said.

The source said the couple was apprehended after returning from Macao. Police took the pair to their residence in Kowloon Tong and two other places in Yuen Long and searched the premises. They were later taken to Police Headquarters in Wan Chai for further investigation and remanded into custody.

The sudden winding up of what was once the largest local home appliance retailer left more than HK$10 million in unpaid salaries and severance payments, affecting some 350 staff members.

The financial woes of the retail chain, established by veteran electronics trader Hui in 1997, first surfaced a week before the closure — when the courts received multiple claims from landlords of various DSC outlets for late rent payments.

Before the flare-up, the retailer conducted a big clearance sale, accepting only cash. Last Monday, bargain snappers rushed to the outlets only to find that they were closed, with notices saying DSC had officially ceased operations.

Following the shutdown, the Consumer Council received more than 2,200 complaints and inquiries. Most of them involved people unable to receive goods after payment.

The source said 27 suppliers claiming more than HK$37 million were involved in the case. Several furniture and home appliance suppliers told police they were concerned about the likelihood of fraudulent activities.

The couple was reported to have fled to Macao a day before the winding up. The pair was suspected of purposely ordering a large quantity of goods despite the closure.

Meanwhile, the Labour Department called a labor mediation meeting on Monday afternoon. About 30 staffers attended the meeting, but the employers did not show up.

According to the law, if Hui declares that he is unable to pay back the debts and the outstanding salaries, the employees can get compensation from the Protection of Wages on Insolvency Fund without going to the Labour Tribunal.

The department said Hui’s lawyer had earlier contacted the department and requested to reschedule the meeting. But an employee representative criticized Hui for insincerity.

The department is expected to launch a criminal prosecution against the retailer under the Employment Ordinance, as it failed to pay its employees for a month.

A group of suppliers will hold a press conference to voice their concerns today (Tuesday).

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