Jailed Hong Kong media tycoon Jimmy Lai Chee-ying has asked a court to restore his voting rights as the major shareholder of Next Digital after the government froze nearly HK$500 million (US$64.4 million) of his assets under the national security law.
The security minister exercised his power under Article 43 of the law in May to prohibit Lai from handling his 1.88 billion shares, amounting to 71.26 per cent of the total issued, as well as funds in the local bank accounts of three companies he owned.
The police’s National Security Department later confirmed to the media company the 73-year-old must not in any way exercise his voting rights on the Next Digital board without the permission of the secretary for security.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
In the writ filed with the High Court on Wednesday, Lai’s lawyers argued the ban on exercising his voting rights did not constitute “dealing with” the frozen properties under the security law’s implementation rules.
They applied for the court’s approval to allow Lai to vote in the company’s general meetings, which would effectively override the ban.
The formal application will be heard on July 22 before Mr Justice Anthony Chan Kin-keung, who is among a pool of jurists selected by city leader Carrie Lam Cheng Yuet-ngor to handle security law proceedings.
The security minister can bar a person from dealing with properties believed to be connected with a national security offence, unless expressly allowed, for a maximum period of two years. But the affected person can apply to a designated judge at the Court of First Instance to revoke or vary the order.
The action against Lai marked the first time authorities had invoked their new powers to go after the assets of a listed company on suspicion they could be related to the commission of a national security crime.
Lai, who founded the now-defunct Apple Daily newspaper, is facing a charge of colluding with foreign forces and a similar conspiracy charge in relation to two separate alleged plots authorities claim were aimed at attracting international sanctions. He will stand trial in the High Court and faces up to life in prison.
He is currently serving a 20-month jail sentence for his roles in three unauthorised demonstrations during the anti-government protests two years ago.
The company has previously stated the ban on Lai “was not expected to have any impact on [its] operational and financial performance” as the tycoon was no longer a member of the board.
National security officers raided the offices of Next Digital last month and arrested five senior executives for their roles in the publication of more than 30 articles alleged to be part of a conspiracy involving Lai calling for foreign sanctions.
Two of the executives have since been charged and remanded in custody. Two other writers were also arrested in an ongoing crackdown.
The 26-year-old tabloid-style Apple Daily folded on June 23, with its online platforms, including its Facebook and Twitter accounts, ceasing operations.
Next Digital, meanwhile, said chief executive Cheung Kim-hung, chief operating officer Royston Chow Tat-kuen and chief financial officer Dennis Hung Chi-keung had resigned.
In a statement to the stock exchange, the company said it received copies of Cheung’s resignation letters for his positions as CEO, executive director, and member of the executive and nomination committees, as well as for his other roles within the group, all with effect from June 30.
Cheung was remanded in custody after being charged with collusion with a foreign country under the national security law.
The group said Chow resigned for health reasons from his positions as executive director, chief operating officer and company secretary, as well as his other posts, with effect from July 2.
Hung also tendered his resignation with effect from July 2.
Trading in the company’s stock has been suspended since June 17, when police detained several Apple Daily executives, pending further announcements.