HONG KONG – The Hong Kong media group Next Digital Ltd. announced on Sunday that it is seeking liquidation and that its board of directors has resigned to facilitate the process.
Next Digital, owned by jailed tycoon Jimmy Lai, was the editor of Apple Daily, a popular pro-democracy newspaper that shut down in June after its newsroom was raided by police officers investigating whether there were articles against a Beijing launch in Hong Kong violated national security law last year.
The company’s assets have been frozen as part of the national security investigation and its shares have been suspended from trading since June 17.
In a filing on the Hong Kong Stock Exchange late Sunday, Next Digital said that the best interests of shareholders, creditors, employees and other stakeholders would be served through an orderly liquidation.
Ip Yut Kin had submitted his resignation as non-executive director and chairman, while Louis Gordon Crovitz, Mark Lambert Clifford and Elic Lam submitted their resignation as independent non-executive directors, the company said.
The company’s CEO, arrested at the time of the raid, in connection with a security breach investigation, and its chief financial officer resigned in July.
Next Digital said it hoped the resignations of the remaining board members would result in liquidators being allowed by the Hong Kong government to approve payments directors couldn’t approve, including creditors and former employees.
She also hoped liquidators could complete value-adding transactions that would generate funds for the benefit of creditors.
The company said the Hong Kong government never disclosed which articles Apple Daily published allegedly violated the national security law, and the uncertainty created a climate of fear that has led to many resignations, including those advocating compliance statutory provisions of the listed company are responsible.
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“We note that the events affecting the company and its employees following the appeal of the National Security Act took place even though there were no trials and no convictions,” it said. “Under this new law, a company can be forced into liquidation without the intervention of the courts.”
“As Apple Daily noted many times, Hong Kong people have a collective reminder of what life was like elsewhere when freedom of expression was denied: no other rights are secure,” it says.
Critics of the national security law, introduced in June 2020, say it was used to silence dissent and undermine basic freedoms, including the media, in the former British colony that returned to Chinese rule in 1997.
Authorities have denied the erosion of rights and freedoms in Hong Kong, but said actions that threatened China’s national security have crossed a red line. Security officials said law enforcement actions are based on evidence and have nothing to do with any person’s background or occupation.