The three were held overnight and charged with fraud. Prosecutors say the executives tried to defraud the publisher’s landlord by establishing a private office for Lai in the same building, a technical violation of Next Digital’s lease. Mark Simon, a confidant and former business aide of Lai, said the issue was an “ongoing commercial dispute” that has been “criminalized” by the authorities.
China’s government has moved this year to stamp out political opposition and crush the pro-democracy movement in Hong Kong, most notably with a new national security law that allows for penalties of life in prison for vaguely defined crimes such as “secession” and “foreign interference.”
It was Lai’s fourth arrest this year — first in February, then in April and again in August, the latter under the security law. His alleged national security offense relates to colluding with foreign powers, police say, but he has not been formally charged under that law. The earlier charges relate to his participation in anti-government protests that swept Hong Kong last year.
At the court hearing on Thursday for the fraud charge, a judge ruled that Lai should be held in custody, determining that the mogul was a flight risk because of his separate national security arrest.
Lai’s passport has been held by police since early this year, Simon said, and he is unable to leave Hong Kong. Lai was granted bail after previous arrests, and the two Next Digital executives arrested alongside him were granted bail.
Lai will be held in custody until April, when his case is scheduled to return to the courts.
Antony Dapiran, a lawyer and commentator on Hong Kong politics, said on Twitter that the action was a classic case of “lawfare” — selective use of legal provisions to target the Chinese government’s political opponents. “How many pro-[Beijing] businesspeople are happily engaged in similar ‘fraud’ that will never be investigated?” he wrote.
Next Digital executives present at the hearing said Lai’s lawyers would appeal. “The case is relatively minor; they should not have denied . . . bail,” said Cheung Kim-hung, the chief executive of Next Digital and publisher of Apple Daily.
On Wednesday, three other icons of Hong Kong’s democracy movement — Joshua Wong, Agnes Chow and Ivan Lam — were sentenced to prison terms for their role in a protest outside the Hong Kong police headquarters in June last year.
The activists, all in their 20s, rose to prominence as teenagers during the 2014 Umbrella Movement, an ultimately unsuccessful 79-day street occupation that called on China to allow Hong Kong voters to directly elect the city’s leaders.
Chow was also arrested under the national security law in August, on the same day as Lai. The arrests were accompanied by a raid on Next Digital’s offices in which hundreds of police officers searched Apple Daily’s newsroom. The sweep was widely viewed as a sign that Beijing would use the security law aggressively, rather than as a deterrent, and that Hong Kong’s constitutionally protected press freedoms were imperiled.
Lai, a self-made billionaire, has long been targeted by Beijing, which has accused him of treachery and bankrolling pro-democracy causes. He was born in Guangzhou, in southern China, and entered Hong Kong as a 12-year-old stowaway before making a fortune in the garment business.
After the Tiananmen Square massacre in 1989, Lai became a leading critic of the Communist Party, and he founded Apple Daily with his own money. He is particularly grating to China because of his long-standing relationships on Capitol Hill, including with Secretary of State Mike Pompeo and House Speaker Nancy Pelosi (D-Calif.).
Even after his national security arrest, Lai has continued to criticize the Hong Kong and central governments and has urged the incoming Biden administration to be tough on China.
Theodora Yu contributed to this report.