HONG KONG (BLOOMBERG) - As news broke that China is pressuring Jack Ma's Alibaba Group Holding to sell the South China Morning Post, surprised employees pondered the future of Hong Kong's main English-language daily.
When Hangzhou-based Alibaba bought the SCMP in 2015 for US$266 million (S$357.8 million), it injected much-needed cash into the operations and pledged that the century-old newspaper would retain editorial independence.
While the newspaper has come under steady criticism for a tilt toward Beijing under Alibaba, its journalists closely covered the 2019 pro-democracy protests in Hong Kong while also publishing diverse opinions and coverage critical of China.
Now fears are growing among some staff members that a Chinese state-owned company could eventually take over from Alibaba and put the newspaper under Beijing's thumb, according to an employee who asked not to be identified.
Such a move would mark one of the most significant blows yet to the city's once free-wheeling media industry, where independent outlets have faced increasing pressure since Beijing imposed a sweeping national security law last year.
"There is suspicion that if a Chinese entity takes it over, or a Chinese billionaire takes it over, that they're going to change the editorial line," said Keith Richburg, director of the Journalism and Media Studies Centre at the University of Hong Kong and president of the Foreign Correspondents' Club in Hong Kong.
"This idea that the SCMP might be sold at a time when people in Beijing are talking about the need for 'patriots' to be running media entities is, I would say, very, very concerning." Beijing has moved to stifle Hong Kong's democracy movement over the past year, rounding up dissidents and revamping the election system to give the Communist Party a veto on anyone who stands for office.
The move has been criticised by countries including the US and the UK, which this week said China was in a "state of ongoing non-compliance" with the treaty that paved the way for the 1997 handover of the former British colony - drawing an angry response from Beijing.
China in recent months has heaped pressure on Hong Kong journalists, most notably with the November arrest of media tycoon Jimmy Lai, founder of the pro-democracy newspaper Apple Daily, who remains in custody on a national security charge after being denied bail. Police also conducted a high-profile raid of Apple Daily's newsroom, and have arrested other executives from its publisher Next Digital.
Ma, Alibaba's co-founder, has been at the center of a government crackdown that began last year, targeting the e-commerce giant and its finance affiliate Ant Group. The Wall Street Journal first reported China's government was asking Alibaba to shed media properties. Representatives for Alibaba in China and the US didn't respond to requests for comment.
China's pressure on Alibaba stems from a concern about the technology giant's influence over public opinion in the country, according to a person familiar with the matter. While no specific buyer has been identified, it is expected to be a Chinese entity, the person added.
A Bloomberg investigation last year showed the Communist Party has been amassing influence in Hong Kong through its ownership of newspapers and publishing houses via its Liaison Office in the city.
'No plans for an ownership change'
In an internal SCMP memo to staff on Tuesday seen by Bloomberg News, Chief Executive Officer Gary Liu dismissed reports of Alibaba coming under pressure to sell its media assets. "Be assured that Alibaba's commitment to SCMP remains unchanged and continues to support our mission and business goals," he wrote in the memo.
A later message sent on the same day by Liu reiterated that "there are no plans for an ownership change."
"SCMP remains committed to serving our global readers with independent journalism and in-depth analysis, as we have for over 117 years," a spokesperson for the newspaper said by email.
Since the national security law came into force last year, media outlets have started to tread carefully out of fear of breaching vaguely defined provisions on subversion and secessions.
The government this month appointed a career bureaucrat with no media experience as director of public broadcaster Radio Television Hong Kong, which has seen programmes that were critical of the government censored or pulled.
On Jan 6, the same day the 55 democracy activists and former lawmakers were arrested, the national security department requested documents from Apple Daily, Stand News, and In-Media. The Hong Kong government didn't respond to a request for comment, but has repeatedly said that press freedom remains intact despite the security law.
'I'll be arrested'
"I'm prepared that I'll be arrested," said Ronson Chan, deputy assignment editor of Stand News. "I am not prepared to leave Hong Kong, nor Stand News. Hong Kong needs us - Hong Kongers that still believe in the values of press freedom, especially in the wake of a growing mainland Chinese takeover."
The Hong Kong Free Press, a non-profit digital news outlet that describes itself as impartial, has also come under attack. This month a magazine owned by Sing Tao News Corp, which last month came under the control of the daughter of a Chinese tycoon, devoted a four-page spread to insinuating that HKFP may have violated the national security law.
The worsening environment has prompted the news organization to only use encrypted devices, check in with staff regularly and literally chain computers to the desks, according to Tom Grundy, founder and editor-in-chief of HKFP.
"We expect to be forced to navigate increased bureaucratic and legal scrutiny," he said.
"Though our current policy is to hope for the best, prepare for the worst and 'keep calm and carry on.'"