Apple Daily, Hong Kong's most-popular newspaper, faces extinction this week after its staff were charged with violations of the much-loathed National Security Law in Hong Kong.
Next Digital (HK:0282), the company that publishes the newspaper and its Web site, will decide at a management meeting on Friday whether to cease publication of the 26-year-old newspaper.
It would silence the loudest pro-democracy voice in the city, one that has provided important and critical coverage of the city, and mainland China. If it ceases publication, that will leave not only Hong Kongers but also the broader Chinese-speaking community around the world with far less insight into what's going on behind China's "Bamboo Curtain." Apple Daily's views and insights are highly influential among China watchers at home and abroad.
If management rules to cease operations, the Web site and digital news would stop updating at 11:59 p.m. on Friday, according to an internal memo obtained by the Hong Kong Free Press site. The last print issue would be on Saturday.
Trading in Next Digital shares, a popular protest purchase by pro-democracy Hong Kongers, remains suspended on the Hong Kong Stock Exchange. A halt went into effect at the start of last Thursday's trade.
Apple Daily executives said they have written to the Hong Kong government on Monday requesting it to unfreeze its accounts so it can pay staff salaries. Three of its companies - Apple Daily Ltd., Apple Daily Printing Ltd. and AD Internet Ltd. - saw their accounts frozen on Thursday, locking up HK$18 million (US$2.3 million) and making it difficult to pay employees or for its printing presses to run.
If Hong Kong Secretary for Security John Lee does not agree to free up the accounts, Next Digital would need to launch a court case. It risks running afoul of Hong Kong labor laws if it does not pay staff salaries at the end of June.
The CEO of the Hong Kong Confederation of Trade Unions, Mung Siu-tat, told Next Digital that it was "unheard of" for a viable company with the cash to pay its staff to be prevented from paying salaries. Mung said financial mismanagement was the prime cause of such difficulties elsewhere. Mung added that the security chief was effectively creating the conditions for the salaries to fall into arrears, so minister Lee should solve it as well.
Mark Simon, a U.S.-based aide to Apple Daily founder and owner Jimmy Lai, says Next Digital has "US$50 million in the bank," he said on CNN. "Our problem at Apple Daily is not that we don't have the funds."
Lai is serving a 20-month sentence for participating in unauthorized pro-democracy demonstrations. Those anti-government protests were not approved by the government, which has now convicted him for attending. He is also charged separately under the National Security Law.
On Saturday, Apple Daily editor-in-chief Ryan Law and Next Digital CEO Cheung Kim-hung, who is also publisher of the paper, were denied bail on charges that they have colluded with a foreign power "to endanger national security," the same charge that Lai faces.
The charges are based not on any actual collusion, or any evidence of the involvement of any foreign power at all. There's no secret plot. The charges are simply based on about 30 articles recommending sanctions against Hong Kong, as I explained on Friday. The investigation continues into three other newspaper executives who were also arrested.
They're trumped-up charges that would be laughed out of court in countries with well-defended protections for free speech. How weak a nation do you have to be, that your hold on power is left grasping at its fingertips thanks to a little criticism in news editorials? Why can't you recommend sanctions if you want?
You can't in Hong Kong. Beijing inserted the National Security Law into Hong Kong's constitution directly, without input from Hong Kong legislators, effective June 30, 2020. The law outlaws but does not define "secession," "subversion," "terrorism" and "collusion," which are punishable by life sentences. While most of the law is vague, it very specifically says it's a crime to demand that foreign powers impose sanctions on Hong Kong or China - wording apparently written exactly with this kind of prosecution in mind.
The board of Next Digital had originally been due to meet in a week, on June 28, to announce results for the year that ended this March. They now have more pressing issues to discuss - management also said they would meet today to discuss the newspaper's future.
Apple Daily has been a perpetual thorn in the side of the mainland government, as well as its puppet administration here in Hong Kong. Historically, though, it has been protected by Hong Kong's vaunted freedoms, which set the city apart by allowing freedom of expression, religion, demonstration and political thought.
The newspaper celebrated its 26th anniversary on Sunday. The arrests of its executives mark the first time that news gathering and articles have been prosecuted as a national-security crime in Hong Kong. But since the newspaper remains extremely popular - its special edition run of 500,000 the day after Thursday's arrests sold out in many locations - both with readers and staff, it is the freezing of its accounts that truly threaten the company's existence.
This selective application of the law in Hong Kong should worry any business operator. Hong Kong was judged to be the "freest economy in the world" for 25 straight years by the conservative Heritage Foundation think tank. However, it lost that crown to Singapore in 2020 due to political interference by mainland China, and has now been stripped out of the ranking entirely.
Both the think tank and the U.S. government have ruled that Hong Kong is no longer self-governed enough to warrant special status separate from mainland China. Heritage Foundation founder Edwin Feulner says the "loss of political freedom and autonomy suffered by Hong Kong over the past two years has made that city almost indistinguishable in many respects from other major Chinese commercial centers like Shanghai and Beijing."
In mainland China, it is par for the course for political enemies of the Chinese Communist Party to suddenly be suspected of and convicted for financial crimes. "Fraud" or "corruption" are also the chief method of weeding out members of the Communist Party who fall afoul of internal political maneuvering. These prosecutions clearly have a political motive, masked in the courts as simply being the "impartial" implementation of criminal or civil law.
The prosecution forcing Apple Daily out of business indicates how that tactic is now being applied in Hong Kong. Any company operating here, and any expatriate employee based here, now needs to fear for legal and financial attacks launched because they anger the puppet Hong Kong administration, or the Beijing powers that direct them. These are scary times indeed to be a critical voice operating in Hong Kong.