The parent company of Hong Kong’s Apple Daily newspaper, which folded last week, will cease operations from Thursday but has vowed to try to pay its employees, according to an internal memo.
Next Digital, founded by jailed media tycoon Jimmy Lai Chee-ying, also revealed in the memo that three bank accounts linked to its associated companies remained frozen.
Lawyers had been appointed to look into how to repay outstanding wages and compensation to staff even after the company halted its operations, it added. “The road ahead is difficult, but [we will] continue to move forward. Until we meet again,” the memo said.
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The news came a day after Next Digital agreed to sell its Taiwan online publishing unit, Amazing Sino International, to an undisclosed party. A stock market filing said the deal was expected to be completed by the end of July.
Lai founded the company in March 1990, having decided to branch out into media after the 1989 crackdown in Tiananmen Square.
He launched Next Magazine in 1990, then Apple Daily in 1995. As a publication critical of the central government, it clicked quickly with Hong Kong readers then anxious about the impending return of the city to mainland Chinese rule.
A former Apple Daily journalist said colleagues planned to take a wait-and-see attitude and believed the company had done everything it could.
“Our usual pay date is on every 28th of the month, and it was just a few days behind,” he said. “I would say the company was not an irresponsible one, thus we should be fine, even though we might have to get the payment a bit later. Of course, we hope the Security Bureau can release the funds sooner.”
Ceasing operations, however, did not mean the company would shut down very soon, according to Derek Lai Kar-yan, vice-chairman of accounting firm Deloitte China.
“The company has no income at the moment, thus it might consider to stop operating so it can save some operational costs,” he said. “But that does not mean it’s game over. The board of directors can still consider selling the businesses or privatisation, unless it faces insolvency.”
Under its listing rules, the stock exchange could deem an issuer had failed to comply with regulations in situations when it did not have substantial operations for 18 months, Lai added.
The tabloid-style newspaper printed its final edition last week after five of its top executives were arrested during a police operation on June 17.
Assets of three affiliated companies – Apple Daily Limited, Apple Daily Printing Limited and AD Internet Limited – totalling HK$18 million (US$2.32 million) were frozen the same day.
Next Digital’s management had said that without access to the cash it was unable to pay wages and had no choice but to close.
The company employed at least 800 people when it ceased operating, according to recent Apple Daily reports.
The group had previously said that if the Security Bureau rejected its request to release the funds, it would file an application with the Court of First Instance to revoke the order.
Under the Employment Ordinance, wages and termination payments should be honoured no later
than seven days after a contract has expired.
The Labour Department weighed in on Wednesday, expressing “deep concern” over the matter and calling on Next Digital to “maintain effective communication with its employees over employment matters with appropriate arrangements”.
A department spokesman warned that any employer who wilfully failed to do so and without reasonable excuse was liable to a maximum fine of HK$350,000 and three years in jail.
On Sunday, an internal email revealed the company had received a request from the bureau to hand over a list of employees and other “sensitive information”.
“As this involves personal privacy, the management is currently reviewing and following up the matter with the legal team,” the company said.
In the past two weeks, a total of five executives and two editorial writers of the paper have been arrested under the national security law.
While five were granted bail, editor-in-chief Ryan Law Wai-kwong and publisher Cheung Kim-hung were charged with conspiring to collude with foreign forces. Trading in the company’s shares was halted on June 17.
Apple Daily has been accused of publishing more than 30 articles calling for foreign sanctions against Hong Kong and the mainland.
This article Hong Kong parent company of Apple Daily to cease operations on Thursday, will still try to pay staff despite authorities not releasing frozen cash first appeared on South China Morning Post