In Hong Kong, Jimmy Lai's Next Digital says he was forced to shut down

HONG KONG – Next Digital, a Hong Kong media company that has published vehement criticism of the Chinese government for decades, said on...

HONG KONG – Next Digital, a Hong Kong media company that has published vehement criticism of the Chinese government for decades, said on Sunday it would take steps to shut down after an official crackdown left it helpless to function.

In a statement, the company’s board called for the company to be liquidated and said it had resigned.

“We have concluded that the best interests of shareholders, creditors, employees and other stakeholders will be served by an orderly liquidation”, It said, adding that he hoped such a move would allow payments to creditors and former staff.

The announcement was the latest in a series of blows to The Hong Kong Freewheel Press, which was stifled by the national security law the mainland Chinese government imposed on the former British colony to quell dissent over a year ago.

Founder and controlling shareholder of Next Digital, Jimmy lai, is in prison, charged with crimes which include violating the security law. In June, Hong Kong officials froze some of the company’s bank accounts, forcing its flagship newspaper, Apple Daily, to close. Several editors and executives at Next Digital, in addition to Mr. Lai, have been charged with crimes.

Apple Daily, founded in 1995, was the leading pro-democracy voice in Hong Kong media, frequently denouncing the ruling Chinese Communist Party and its allies in local government. His aggressiveness quickly made powerful enemies for Mr. Lai, who was forced to sell a clothing chain after the newspaper criticized a Chinese leader in the print media.

Under the National Security Law, which China imposed after a wave of pro-democracy protests in 2019 which called into question his control of Hong Kong, Mr. Lai and his media empire quickly became a target.

Next Digital said it would have remained solvent if its bank accounts had not been frozen. While the subject of advertising boycotts by Chinese government supporters, Apple Daily was widely read and he sold a million copies of his final edition. Shares of Next Digital, whose trading was suspended in June, have shot up at times over the past year, as supporters of Hong Kong’s pro-democracy cause bought up shares to show their support for the company.

Next Digital noted that it was forced to shut down before one of the cases against its senior officials came to trial. Its supporters have argued that the actions taken against Next Digital and its publications undermine not only media freedom in the city, but also property rights and Hong Kong’s reputation as a good place to do business.

“When you abuse state power, freeze bank accounts and throw people in jail – the editor, the managing director, the founder – it smacks of the banana republic,” said Mark Clifford, independent non-executive director by Next Digital. “This is not what made Hong Kong an international investment center or the image it is proud of, with the rule of law and the protection of property rights.”

Mr. Lai is expected to stand trial later this year on a fraud charge related to subletting the company’s headquarters, as well as charges under the National Security Act. The charges allege that he colluded with foreign powers in funding a campaign that ran advertisements, in publications such as the New York Times, calling for US sanctions against Hong Kong.

Mr. Lai founded the company which became Next Digital in 1990 with just one magazine. It grew to include Apple Daily, which eventually brought an edition to Taiwan. The board statement said the directors were confident Mr. Lai would join them in thanking the company’s readers over the years.

Next Digital’s problems have worsened in recent months. Hong Kong financial secretary Paul Chan has appointed an inspector to investigate the company’s financial affairs, a power rarely used under local law. The Financial Reporting Council, Hong Kong’s audit oversight body, opened an investigation into the company in August. And audit firms have refused to work with Next Digital, raising doubts about its ability to submit financial statements in late September as required.

With its accounts frozen, the company has been unable to pay the unpaid salaries to around 700 editorial staff. Some have found other jobs or started new media businesses, covering topics such as online entertainment and horse racing, but many remain unemployed. A liquidation of company assets could help staff members receive some of the money owed to them.

The Hong Kong Journalists Association distributed cash vouchers to former journalists from Next Digital publications. But reporters were unable to receive government funds for laid-off employees of failed companies because Next Digital still has money in the bank, even though it doesn’t have access.

The company closed the Taiwanese print edition of Apple Daily in May and is in talks to sell its remaining digital business. Other assets, including Taiwanese operations and company records, would most likely be sold once the company begins liquidation.

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Newsrust - US Top News: In Hong Kong, Jimmy Lai's Next Digital says he was forced to shut down
In Hong Kong, Jimmy Lai's Next Digital says he was forced to shut down
Newsrust - US Top News
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