Jimmy Lai's Next Digital Heads For Liquidation After National Security Raid

A Hong Kong media empire founded by pro-democracy media mogul Jimmy Lai has announced it is going into liquidation, citing a draconian national security law imposed on the city by the ruling Chinese Communist Party (CCP) from July 1, 2020.

All of the directors of Lai’s Next Digital resigned on Sunday in the wake of the closure of its flagship Apple Daily newspaper in June.

The move came after Next Digital had its assets frozen pending an investigation into charges of “collusion with foreign powers,” brought against Lai and senior journalists at the Apple Daily following a raid by national security police on June 17.

The company made the announcement the the Hong Kong Stock Exchange late on Sunday.

“The board of directors of Next Digital Limited hereby announces the resignations of all the directors of the Company with effect from 23:59 (Hong Kong time) on 5 September 2021,” the statement said.

Ip Yut Kin has tendered his resignation as a non-executive director and chairman of the company, while Louis Gordon Crovitz, Mark Lambert Clifford and and Elic Lam have resigned as independent non-executive directors at the same time, it said.

Trading in Next Digital shares has been suspended since the national security police raid on June 17, and will remain suspended.

“We have concluded that the best interests of shareholders, creditors, employees and other stakeholders will be served by an orderly liquidation, which we hope will result in liquidators being allowed by the Hong Kong government to authorise payments that directors were banned from approving, including for creditors and for former staff,” the board members said in a statement accompanying the announcement.

Signage for Next Digital and Apple Daily are seen displayed outside the offices of the the offices of the local Apple Daily newspaper in Hong Kong , June 17, 2021. Credit: AFP

‘No other rights are safe’

Next Digital arranged on Aug. 9 to surrender the remaining lease on its former business headquarters in the Tseung Kwan O industrial estate.

“We observe that the events affecting the company and its people following the invocation of the National Security Law occurred despite there having been no trials and no convictions,” the Next Digital board members’ statement said. “Under this new law, a company can be forced into liquidation without the involvement of the courts.”

“As Apple Daily often observed, Hong Kong people have a collective memory of what life was like elsewhere when freedom of speech was denied: No other rights are safe,” it said.

The announcement by Next Digital came as Tiananmen vigil organizers the Hong Kong Alliance in Support of Patriotic Democratic Movements of China refused to cooperate with a request by national security police to hand over detailed information on its finances, membership and activities dating back years.

Alliance vice-chairwoman Chow Hang-tung said the group wouldn’t be cooperating with the Aug. 25 order to hand over confidential documents by Sept. 7, saying it wasn’t bound to comply because it isn’t an agent of a foreign government under Article 43 of the national security law.

Chow said the Alliance is considering filing a judicial review to challenge that definition.

“They’re trying to intimidate the people who participate in the social movement,” Chow told government broadcaster RTHK.

“And we now clearly say that this sort of intimidation will stop at us. We will not transmit that fear through our compliance,” she said.

The police said they would take action against any group failing to comply with such orders, while the security bureau warned that anyone refusing to provide information under the law could face a fine or a prison sentence.

Debating disbanding

Chow said Alliance committee members remain at risk of arrest and prosecution. A plenary meeting of the Alliance will decide whether or not to disband.

A statement issued by the Alliance said nothing in the police letter mentioned the rationale for the allegation that the Alliance is a “foreign agent” nor clearly indicates the country or organization that is is suspected of acting for.

The letter demanded that records of all activities, expenditures, and contacts with “political parties or any other organizations that pursue political ends outside the territory of the People’s Republic of China or in Taiwan” be submitted to police by Sept. 7.

“It seems that they are fishing for so-called evidence that Hong Kong Alliance is a ‘foreign agent’,” the group said.

“Hong Kong Alliance … refuses to cooperate with such an unreasonable demand [and] refuses to be used by the authorities to spread fear,” it said.

It said the Alliance is in the process of considering whether or not to disband.

“The Standing Committee … decided only by a narrow majority to vote on a proposal to dissolve the organization at a General Assembly,” the statement said.

The matter will be put to a vote at an Extraordinary General Assembly on Sept. 25, it said.

More than 100 opposition politicians, activists and protesters have been arrested so far on charges under the national security law, including allegations of secession, subversion and terrorist activities, with more than 10,000 arrested under pre-existing laws for their part in the 2019 protest movement against the erosion of Hong Kong’s promised freedoms.

Translated and edited by Luisetta Mudie.

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