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Subsequent Digital shares halted, jailed proprietor Lai pleads responsible to unlawful HK meeting

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HONG KONG — Subsequent Digital Ltd shares had been suspended on Monday after authorities froze belongings of its jailed proprietor Jimmy Lai beneath 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 keep suspended forward of an announcement by the corporate concerning the frozen belongings, together with Lai’s majority stake within the pro-democracy media writer, Subsequent Digital mentioned.

The transfer in opposition to the Lai’s belongings has additional raised worries about freedom of media and the way forward for Subsequent Digital, which Lai has been conserving afloat with loans. Subsequent Digital CEO has, nevertheless, sough to allay investor considerations saying the frozen belongings don’t have any hyperlink with the corporate’s financial institution accounts.

Given that is the primary time a listed agency has been focused beneath the brand new safety regulation imposed by China in 2020, it additionally fuels considerations concerning the broader funding surroundings within the Asian monetary hub.

Freezing Lai’s belongings was an necessary measure aimed toward stopping extra crimes, Secretary for Safety John Lee mentioned, declining to provide extra particulars citing ongoing authorized procedures.

“It’s unlawful actions we’re coping with, not press work,” the Hong Kong official advised reporters.

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Lai, a democracy activist and staunch Beijing critic, was sentenced to 14 months in jail for participating in unauthorized assemblies throughout anti-government protests in Hong Kong in 2019, and is among the many most excessive profile arrests made beneath the safety regulation. He faces three alleged expenses beneath the brand new regulation, together with collusion with a overseas nation.

Lai and 9 different activists pleaded responsible within the District Court docket to expenses of organizing an unauthorized meeting on Oct. 1, 2019, China’s nationwide day, as a trial started on Monday.

Lai’s responsible plea was broadly anticipated after an identical plea in his earlier unlawful meeting trial https://www.reuters.com/article/us-hongkong-security-idUSKBN2BU11S.

Sentencing is predicted on Could 28.

Lai has a 71.26% stake in Subsequent Digital price round HK$350 million ($45 million) based mostly on Friday’s closing share value.

However the freezing of Lai’s belongings won’t 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 advised the Apple Day by day newspaper.

Subsequent Digital runs the influential pro-democracy tabloid Apple Day by day.

A senior administration supply at Apple Day by day advised 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’s merely a matter of in the event that they need to do it. In the event that they need to transfer (on us), they’ll transfer,” the supply mentioned.

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CASH-STRAPPED

With out recent 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 “necessary supply of funding” and might not be out there anymore given the freeze, the paper added.

On the time, the group’s financial institution borrowings amounted to HK$262.3 million, repayable inside three years and its web money place was HK$228.7 million.

The paper reported on Friday its Taiwan arm would cease publishing its print model given declining promoting income and troublesome enterprise situations in Hong Kong linked to politics. It mentioned “pro-China forces” in Hong Kong had been boycotting numerous promoting assets.

Authorities say media freedom is unbroken, however warn nationwide safety is a purple line.

Officers have criticized Apple Day by day’s protection and flagged the introduction of “pretend information” laws.

“I simply hope that you understand our pals exterior can stand 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, mentioned earlier than getting into courtroom. (Reporting by Donny Kwok, James Pomfret, Sharon Tam, Yoyo Chow, Jessie Pang; Writing by Marius Zaharia; Enhancing by Himani Sarkar)

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In-depth reporting on the innovation economic system from The Logic, delivered to you in partnership with the Monetary Publish.

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