(Yicai Global) May 23 -- Tera Wellness Management has refuted an online rumor that the struggling operator of a popular Chinese fitness chain is going bankrupt and that it will soon start to hand back membership fees.

Tera Wellness is unable to continue operations because of a lack of liquidity and poor management, according to a document circulating online yesterday. The Shanghai-based company will go into liquidation and start refunding subscriptions, it said. The document also provided the contact details of the alleged staff members responsible for refunds.

Tera Wellness has not hired any third-party individual or organization to issue refunds on its behalf, and any acts that persuade its members into joining social media groups in order to receive refunds, or to download any types of application in return for fees, are fraudulent, it said.

The company has reported the matter to the authorities and will also start legal proceedings against those spreading the rumor and those conducting online fraud, it said.

Tera Wellness, which has served over one million members since it opened 15 years ago, was on a blacklist for outstanding debts amounting to CNY3.4 million (USD481,955) as of the end of January, according to data on corporate information provider Tianyancha.

And in February, the firm, which caters to over 50,000 clients a day and employs more than 3,000 staff, had CNY98.3 million (USD13.9 million) frozen due to borrowing disputes, according to Finance China.

Editors: Shi Yi, Kim Taylor