Govt Slams Next Digital Over 'misleading Remarks'

The Security Bureau on Monday accused Next Digital – the parent company of the now-defunct Apple Daily newspaper – of making “misleading remarks” in a company announcement.

In a stock exchange filing on Sunday, Next Digital said the four members on its board of directors, including chairman Ip Yut-kin, were stepping down to protect shareholders, creditors, employees and former employees.

The company said it had not been able to pay its newspaper staff or the costs of doing business, after the then-security secretary John Lee accused the newspaper of breaching the national security law and froze three of its bank accounts, while ordering it not to use funds in other accounts to pay for its expenses.

Next Digital also pointed out that the SAR government had never revealed which articles published by Apple Daily were suspected of violating the national security legislation.

But in a statement, the Security Bureau hit back, saying officials had always acted in strict accordance with the law, and that it is the prevailing arrangement in criminal proceedings for details of the case to only be disclosed to the defendants.

Officials also dismissed Next Digital’s claims that it had ran out of cash after the freezing of accounts.

“In its announcement in May 2021, Next Digital Limited stated that the group had sufficient liquidity, and as at March 31, 2021, the group had a working capital of approximately HK$520 million, which would be sufficient for the operation of Next Digital Limited for 18 months from April 2021 onwards. Next Digital Limited subsequently made an announcement in July 2021, disclosing that it had made an early loan repayment of HK$150 million to its former chairman and major shareholder," the statement said, referring to media tycoon Jimmy Lai, who is currently serving a jail term for unauthorised assembly in 2019.

"The above situation shows that there is no such thing as Next Digital Limited being forced into liquidation due to a lack of funds arising from enforcement actions,” the statement said.

“By putting the blame of its operational decision on law enforcement actions, Next Digital Limited is trying to shift its responsibility, with law enforcement authorities which act in accordance with the law as scapegoat, and maliciously smearing the Hong Kong National Security Law."

Officials said people should not be misled, and urged members of the public to “recognise the facts”.