Adviser to jailed HK tycoon Jimmy Lai says Apple Daily to shut within days

The company has no more access to funds and it plans to hold a board meeting on June 21 to discuss how to move forward. PHOTO: AFP

HONG KONG (REUTERS) - Hong Kong pro-democracy newspaper Apple Daily will be forced to shut "in a matter of days" after authorities froze the company's assets under a sweeping national security law, an adviser to jailed tycoon Jimmy Lai told Reuters on Monday (June 21).

Mark Simon, speaking by phone from the United States, said Next Digital, publisher of the popular Hong Kong newspaper, will hold a board meeting on Monday to discuss how to move forward.

In an internal memo to staff seen by Reuters, the Apple Daily said: "The Board will decide on Friday whether (the company) will continue to operate."

"If the board decides not to continue to operate on Friday, online will stop uploading at 11.59pm on the day, newspaper will cease operation after publishing the June 26 edition."

"We thought we'd be able to make it to the end of the month," Mr Simon said. "It's just getting harder and harder. It's essentially a matter of days."

His comments signal the closure is imminent even after Apple Daily said on Sunday the freezing of its assets had left the newspaper with cash for "a few weeks" for normal operations."

The news comes two days after chief editor Ryan Law, 47, and chief executive Cheung Kim-hung, 59, were denied bail after being charged with collusion with a foreign country.

Three other executives were also arrested last Thursday when 500 police officers raided the newspaper's offices in a case that has drawn condemnation from Western nations, global rights groups and the chief UN spokesperson for human rights.

The three have been released on bail. Simon told Reuters it had become impossible to conduct banking operations.

"Vendors tried to put money into our accounts and were rejected. We can't bank. Some vendors tried to do that as a favour. We just wanted to find out and it was rejected," he said.

The newspaper has come under increasing pressure since owner and staunch Beijing critic Jimmy Lai, who is now in jail, was arrested under the national security law last August and has since had some of his assets frozen.

Three companies related to Apple Daily are also being prosecuted for collusion with a foreign country and authorities have frozen HK$18 million (S$3.1 million) of their assets.

Owned by Lau's Next Digital, Apple Daily is a popular tabloid founded 26 years ago that mixes pro-democracy discourse with celebrity gossip and investigations of those in power. It has been a strong critic of the Hong Kong and Beijing governments.

Late on Monday, Hong Kong media reported that Apple Daily and its online edition would cease operations by Wednesday as most of its employees had resigned.

The looming demise of Apple follows the imposition of national security law on the former British colony last year in response to mass pro-democracy protests in 2019.

Western democracies including the United States say Beijing has used the law to stifle freedoms and impose greater control over the semi-autonomous trade entrepot and financial centre.

In Washington, State Department spokesman Ned Price said the United States was deeply concerned by "selective" and "politically motivated" use of the security law.

"We've seen it used in appalling ways, including to arbitrarily target independent media organisations," he told a regular briefing, adding that efforts to stifle media freedom set back Hong Kong's viability as an international business hub.

Police have said dozens of Apple Daily articles were suspected of violating a new national security law in the first case in which authorities have cited media articles as potentially violating the contentious legislation.

'Choked to death'

Another senior company source with direct knowledge of the matter said the freezing of the firm's core assets - before any trial or due legal process proved any criminality - had made it impossible to pay wages or even electricity bills.

"This is an extraordinary thing for a place that prides itself on (being) a global financial center, that you haven't even filed charges against people and yet you've decided you're going to try to... choke this company to death."

"It's surreal. You know the intensity with which the Chinese Communist Party works. It's a testament to the depths to which they will sink to destroy private companies, without even the fiction of a conviction."

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Editor-in-chief Ryan Law and chief executive officer Cheung Kim-hung were charged with collusion with a foreign country and denied bail on Saturday.

Three other senior executives were also arrested on Thursday and released pending further investigation. Three companies related to Apple Daily are being prosecuted for collusion with a foreign country and authorities have frozen HK$18 million (S$3.12 million) of their assets.

The company said in the memo the board had sent a letter to Hong Kong's Security Bureau to ask that some assets be unfrozen in order for the company to avoid violating labour laws by failing to pay employees. The company asked the Security Bureau to reply by Friday.

The Bureau said in a statement to Reuters it would not comment on case details due to ongoing legal proceedings and any application related to the frozen property would be handled "according to the law".

"Endangering national security is a very serious crime," it said.

The newspaper said in a Sunday article that it was considering challenging the decision to freeze assets in courts, should the Security Bureau reject the request.

The office of the city's chief executive did not immediately respond to a request for comment. Beijing's chief representative in the city, the Liaison Office, also did not immediately respond to requests for comment.

The arrests and scale of the Apple Daily raid have been criticised by Western nations, global rights groups, press associations and the chief UN spokesman for human rights.

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Hong Kong and Chinese officials said press freedom cannot be used as a "shield" for those who commit crimes and slammed the criticism as "meddling".

Next Digital has come under increasing pressure since Lai was arrested last year under the legislation. Lai, whose assets have also been frozen under the security law, is in jail for taking part in unauthorised assemblies.

"We hope that even though this platform will no longer be around that Hong Kong journalists will continue to hold ground and pursue the truth," said Ingrid Tse, the host of an Apple Daily nightly news broadcast who signed off for good on Monday.

In May, Reuters reported exclusively that Hong Kong's security chief had sent letters to tycoon Lai and branches of HSBC and Citibank threatening up to seven years' jail for any dealings with the billionaire's accounts in the city.

A Hong Kong-based spokesperson for Citibank said at the time the bank did not comment on individual client accounts. HSBC declined to comment.

Mr Simon said some reporters had received threatening phone calls from unknown sources.

"Our staff are now just worried about personal safety," he said.

Mr Simon said that based on his understanding from officers' questioning of the executives, around 100 articles were under scrutiny.

"After all this is said and done, the business community is going to look up and recognise that a man's company was gutted and stolen by a communist regime in Hong Kong," he said. "That's a big deal."

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