Subsequent Digital shares halted, jailed proprietor Lai pleads responsible to unlawful HK meeting By Reuters
© Reuters. FILE PHOTO: Media mogul Jimmy Lai, founding father of Apple Day by day, arrives the Courtroom of Last Attraction by jail van in Hong Kong, China February 9, 2021. REUTERS/Tyrone Siu
By Donny Kwok and James Pomfret
HONG KONG (Reuters) – Subsequent Digital Ltd shares had been suspended on Monday after authorities froze belongings of its jailed proprietor Jimmy Lai below a brand new nationwide safety regulation in Hong Kong, whereas the tycoon pleaded responsible to participating in an unlawful protest in October 2019.
The shares will stay on a buying and selling halt forward of an organization announcement relating to the freeze in Lai’s belongings, together with his majority stake within the pro-democracy media writer, Subsequent Digital stated.
The transfer in opposition to Lai’s belongings has raised worries about the way forward for Subsequent Digital, which he has been holding afloat with loans, though the corporate’s CEO has stated that the frozen belongings haven’t any hyperlink with its financial institution accounts.
Given that is the primary time a listed agency has been focused below the brand new safety regulation imposed by China in 2020, it additionally fuels issues in regards to the broader funding setting within the Asian monetary hub.
Lai, a democracy activist and staunch Beijing critic, was sentenced to 14 months in jail for participating in unauthorised assemblies throughout anti-government protests in Hong Kong in 2019, and is among the many most excessive profile arrests made below the safety regulation. He faces three alleged costs below the brand new regulation, together with collusion with a international nation.
Lai and 9 different activists pleaded responsible within the District Courtroom to costs of organising an unauthorised meeting on Oct. 1, 2019, China’s nationwide day, as a trial started on Monday.
Lai’s responsible plea was extensively anticipated after an identical plea in his earlier unlawful meeting trial https://www.reuters.com/article/us-hongkong-security-idUSKBN2BU11S.
Sentencing is predicted on Might 28.
Lai has a 71.26% stake in Subsequent Digital price round HK$350 million ($45 million) primarily based on Friday’s closing share worth.
However the freeze of belongings belonging to Lai is not going to have an effect on firm operations because the frozen belongings don’t have anything to do with Subsequent Digital’s financial institution accounts, CEO Cheung Kim-hung instructed the Apple (NASDAQ:) Day by day newspaper.
Subsequent Digital runs Apple Day by day, Hong Kong’s most influential pro-democracy newspaper.
A senior administration supply at Apple Day by day instructed Reuters final week, earlier than the asset freeze was introduced on Friday, that the group had tried to “firewall” its media operations from Lai’s different companies, however they believed authorities nonetheless had methods to “neuter” the paper, with out elaborating.
“It is merely a matter of in the event that they wish to do it. In the event that they wish to transfer (on us), they will transfer,” the supply stated.
With out contemporary money injections, Subsequent Digital can solely survive one other 9 or 10 months, Apple Day by day cautioned on Saturday.
A shareholder’s mortgage of HK$756 million, of which HK$500 million had been drawn as of end-September, was an “essential supply of funding” and is probably not out there anymore given the freeze, the paper added.
The group’s financial institution borrowings amounted to HK$262.3 million as of end-September, repayable inside three years. Its internet money place was HK$228.7 million on the time.
The paper reported on Friday its Taiwan arm would cease publishing its print model given declining promoting income and harder enterprise circumstances in Hong Kong linked to politics. It stated “pro-China forces” in Hong Kong had been boycotting varied promoting sources.
Authorities say media freedom is undamaged, however have warned China’s nationwide safety is a pink line.
Officers have criticised Apple Day by day’s protection and flagged the introduction of a “faux information” regulation.
“I simply hope that you already know our buddies exterior can face up to the persevering with oppression that we’re witnessing in Hong Kong, particularly with the media,” Avery Ng, one of many 10 defendants in Monday’s unlawful meeting trial, stated earlier than coming into court docket.
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