Next Digital Board Cites Hong Kong ‘Climate of Fear’ in Resigning

(Bloomberg) — The board of jailed media tycoon Jimmy Lai’s Next Digital Ltd. used a resignation letter to criticize the Hong Kong government for bypassing the city’s courts and using the China-imposed national security law to drive the company out of business.

Next Digital Chairman Ip Yut Kin and directors Mark Clifford, Louis Gordon Crovitz and Lam Chung Yan resigned effective Sunday, according to an exchange filing. They blasted Hong Kong’s government for using security legislation to freeze company bank accounts, arrest top editors and effectively force Next Digital to close. The board members recommended Next Digital be liquidated, adding they hoped the government would allow former employees and creditors to be paid. 

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“The Hong Kong government has never indicated which articles published by Apple Daily allegedly violated the National Security Law,” the filing said. “This uncertainty created a climate of fear, resulting in many resignations among the remaining staff at the Company in Hong Kong, including those responsible for the regulatory compliance duties of a publicly traded company.”

Next Digital’s pro-democracy Apple Daily newspaper, which cheered on historic and sometimes-violent protests that rocked the financial hub in 2019, was raided by 500 police officers in June and closed in the following weeks. Lai, Next Digital’s founder and a well-known democracy activist, is in prison for attending unauthorized protests and also faces several more serious charges under the security law.

Authorities had accused Apple Daily of publishing articles that violated the security law’s prohibition on “collusion with a foreign country or with external elements to endanger national security.” Officials said they were not targeting “normal journalistic work,” but activities that breached the security law.

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