HONG KONG (AFP, REUTERS) - Hong Kong media mogul Jimmy Lai, one of the city's most vocal Beijing critics, was arrested on Monday (Aug 10) under a new national security law for colluding with foreign forces, deepening a crackdown on democracy supporters.

"They arrested him at his house at about 7am. Our lawyers are on the way to the police station," Mr Mark Simon, a close aide, told AFP, adding that other members of Lai's media group had also been arrested.

A police source speaking on condition of anonymity told AFP that Lai was arrested for colluding with foreign forces - one of the new national security offences - and fraud.

Dozens of Hong Kong police officers searched the headquarters of Lai's media group hours after his arrest.

Lai owns the Apple Daily newspaper and Next Magazine, two outlets unapologetically pro-democracy and critical of Beijing.

Live images broadcast on Facebook by Apple Daily's own reporters showed officers searching their newsroom in an industrial park on the outskirts of the international financial hub.

Staff were asked to show identity documents. Some executive offices were sealed off with red cordons. The police later wheeled in stacks of empty plastic containers.

Lai himself was brought back to the office later, initially in handcuffs.

"We can't worry that much, we can only go with the flow," he said, before being escorted into a police vehicle.

Police said around 200 officers entered the premises with a court warrant.

The law allows police to search premises without one "under exceptional circumstances", and also allows for documents, equipment and financial assets to be seized.

The search was finished by mid-afternoon, and police said they had collected 25 boxes of evidence.

Apple Daily reported that one of Lai's sons, Ian, was also arrested at his home, and later showed his restaurant, Cafe Seasons, being raided by police.

Shares of media company Next Digital, which publishes Apple Daily, plunged 16.7 per cent before rebounding to trade more than 344 per cent higher.

Some on Facebook posted screenshots of purchases saying they bought to show support for Lai.

"The market may now think the worst is over," said Mr Kenny Ng, analyst at brokerage Everbright Sun Hung Kai.

Few Hong Kongers generate the level of vitriol from Beijing that Lai does.

For many residents of the restless semi-autonomous city, he is an unlikely hero - a pugnacious, self-made tabloid owner and the only tycoon willing to criticise Beijing.

But in China's state media, he is a "traitor", the biggest "black hand" behind last year's huge pro-democracy protests in Hong Kong and the head of a new "Gang of Four" conspiring with foreign nations to undermine the motherland.

Lai spoke to AFP in mid-June, two weeks before the new security law was imposed on the city.

"I'm prepared for prison," the 71-year-old said. "If it comes, I will have the opportunity to read books I haven't read. The only thing I can do is to be positive."

He described the law as "a death knell for Hong Kong".

"It will supersede or destroy our rule of law and destroy our international financial status," he said.

He also said he feared the authorities would come after his journalists.

The security law targets secession, subversion, terrorism and colluding with foreign forces.

It was brought in to quell last year's often-violent protests.

Both China and Hong Kong have said it will not affect people's freedoms and only targets only a minority.

But its broadly-worded provisions criminalise certain political speech, such as advocating for sanctions, greater autonomy or independence for Hong Kong.

Critics, including many Western nations, believe the law has ended the key liberties and autonomy that Beijing promised Hong Kong could keep after its 1997 handover by Britain.

It "bears out the worst fears that Hong Kong's National Security Law would be used to suppress critical pro-democracy opinion and restrict press freedom," said Mr Steven Butler, the Committee to Protect Journalists' Asia programme coordinator.

"Jimmy Lai should be released at once and any charges dropped."

Mr Ryan Law, Apple Daily's chief editor, told Reuters the paper would not intimidated by the raid.

"Business as usual," he said.

Lai is no stranger to arrest. He is already being prosecuted for taking part in last year's protests - and for defying a police ban to attend a vigil in early June commemorating Beijing's deadly Tiananmen crackdown in 1989.

He had been a frequent visitor to Washington, where he has met senior officials, including Secretary of State Mike Pompeo, to rally support for Hong Kong democracy, prompting Beijing to label him a "traitor".

Hong Kong police said they had arrested seven other people for similar offences and that they are all local men, aged between 39 and 72.

The operation is still ongoing and police are expected to make further arrests.

'HARASSMENT'

An Apple Daily source said that other senior executives in the company were among those targeted and that police were searching their homes.

Next Digital executive director Cheung Kim Hung was seen escorted by police out of the building.

"We are arranging lawyers and so on to defend ourselves. We see this as straight harassment," the source said, adding that Lai was arrested on suspicion of sedition, criminal fraud and colluding with foreign forces.

In a statement, Next Media Trade Union called the search "an extremely rare and serious incident in Hong Kong history", with a "catastrophic" impact.

It said journalists "will continue to guard their posts until the last minute".

Hong Kong Journalists Association chairman Chris Yeung said the search was "horrible".

"I think somewhere in third-world countries, there has been such kind of press freedom suppression; I just didn't expect it in Hong Kong."

Taiwan Premier Su Tseng-chang said "China should not treat Hong Kong this way".

The law has steered China further on a collision course with the West, prompting countries including Australia, Canada and Britain to suspend extradition treaties with Hong Kong.

On major cases in Hong Kong, the central government in Beijing can claim jurisdiction. The legislation allows agents to take suspects across the border for trials in Communist Party-controlled courts.

Apple Daily executive Chan Pui Man said the newspaper will be published on Tuesday.

Prominent young activist Joshua Wong said on Twitter that he "strongly" condemned Lai's arrest.

"Even if Apple Daily publish a pile of blank paper tomorrow, we would go and buy a copy," he said on Twitter.

CHILLING EFFECT

In an interview with Reuters in May, Lai pledged to stay in Hong Kong and continue to fight for democracy even though he expected to be one of the targets of the new legislation.

Before Monday, 15 people had been arrested under the law, including four aged 16-21 late last month.

The new legislation has sent a chill through Hong Kong.

Activists have disbanded their organisations, while some have fled the city altogether, prompting, in some cases, arrest warrants in their name for suspected violation of the new law.

The United States last Friday imposed sanctions on Hong Kong Chief Executive Carrie Lam, the territory's current and former police chiefs and eight other top officials for what Washington says is their role in curtailing political freedoms in the territory, drawing mockery and condemnation from Beijing.

The arrest reflects that Hong Kong "wasn't intimidated" by sanctions, Global Times editor Hu Xijin said in a tweet.