Hong Kong freezes shares of media mogul Lai under security law New Hong Kong protests

Directing the powers of the security law to a listed company for the first time can have consequences on the sentiment for investors in the city.

Hong Kong authorities have frozen the assets of jailed media mogul Jimmy Lai, including all of his company’s Next Digital shares – the first time a listed company has been targeted by national security laws at a financial center.

The target assets also included bank accounts of three Lai-owned companies, Hong Kong Security Secretary John Lee Hong Kong said in a government document.

In a statement issued after the market closed in February, Lee issued notes “Lai Chee-ying (Jimmy) in writing to freeze all shares of Fourth Digital Limited and the local bank account holdings of three owned companies.” he “.

Lai was sentenced to 14 months in prison in 2019 for participating in unauthorized assemblies in pro-democracy protests.

Under a new national security law imposed by Beijing, it faces three charges, including collusion with a foreign country.

The movement against his property was also carried out in accordance with the security law, which criminalizes actions such as subversion, sedition, collusion with foreign forces and secession for life imprisonment.

The authorities ’decision to use the Hong Kong-listed company for the first time under the law’s powers may have an effect on investors’ sentiment.

Since the law was enacted last June, there have been signs of capital flight to foreign countries including Canada, according to government agencies, bankers and lawyers.

Clampdown

Beijing has said it has enacted a law to restore order to the former British colony after protests in favor of democracy and against China in 2019.

However, critics say the law has been used by Chinese communist leaders to promote freedom and pro-democracy campaigns – many of whom have been arrested and imprisoned or have fled into exile.

Cheung Kim-hung, CEO of Next Digital, told the Daily Daily that Lai’s frozen assets had nothing to do with Next Digital’s bank accounts, and that their operations and savings would not be affected.

The company’s employees pledged to “continue to fulfill and denounce their duty,” in a note posted on the Next Digital union’s Facebook page.

According to Hong Kong Stock Exchange presentations, Lai is a major shareholder in Next Digital and holds approximately $ 350 million worth of Hong Kong dollars (US $ 45 million) at 71.26 percent at its closing price on Friday.

The value of the remaining assets “frozen” by the authorities was not immediately clarified.

Next Digital runs the Apple Daily, the most influential pro-democracy newspaper in Hong Kong, which has long been a thorn in the side of Hong Kong and Chinese authorities.

Hong Kong executives recently alerted the Apple Daily about its coverage and spoke of “fake news” about the implementation of the law. Critics say all of this is part of the city’s ongoing crackdown on the media.

The Taiwanese arm of the Apple Daily said on Friday it would stop publishing its printed version, blamed on declining advertising revenues and more difficult business conditions related to Hong Kong’s policy.