All four remaining directors of Next Digital, parent company of the now-defunct pro-democracy Apple Daily, have resigned and called for the company’s liquidation, citing a “climate of fear” created by Hong Kong’s national security law.
Chairman Ip Yut-kin and directors Mark Clifford, L. Gordon Crovitz and Elic Lam announced in a statement on Sunday evening they would step down effective Monday. They called for its liquidation so that shareholders, creditors and former employees could be paid after authorities froze company bank accounts in June.
The move forced the 26-year old newspaper to shut down on June 23, shortly after five of its top executives at the time, including Next Digital CEO Cheung Kim-hung and Apple Daily Editor-in-Chief Ryan Law, were arrested on suspicion of colluding with a foreign country to endanger national security.
No trial nor conviction
“We observe that the events affecting the Company and its people following the invocation of the National Security Law occurred despite there having been no trials and no convictions,” the directors’ statement read.
“Under this new law, a company can be forced into liquidation without the involvement of the courts. We have concluded that the best interests of shareholders, creditors, employees and other stakeholders will be served by an orderly liquidation.”
The exiting executives said they hope the government would authorise payments that company directors had been barred from making, and that liquidators could dispose of assets to benefit creditors, including selling Apple Daily’s operations in Taiwan and other intellectual property assets.
“The Hong Kong government has never indicated which articles published by Apple Daily allegedly violated the National Security Law,” the Next Digital directors said, thanking shareholders, advertisers, staff, and readers for their support despite political pressure.
“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.”
Apple Daily became a particular target of Hong Kong and mainland authorities after the national security law drafted by Beijing was enacted in June 2020. Its founder Jimmy Lai and two of his sons were arrested in August 2020 over suspected conspiracy to collude with a foreign country to endanger national security and conspiracy to commit fraud. Its Tseung Kwan-O newsroom was raided by hundreds of police officers.
The Apple Daily newsroom was raided again by police in June this year and its five top executives as well as two opinion writers were charged under the national security law. Next Digital suspended trading on the day of their arrest.
Lai is now serving a prison sentence over a separate offence related to protests in 2019. He is due to appear in court in mid-October for his national security case but no trial date has been set.
More than 800 former Apple Daily staffers are owed salary after company accounts were frozen. Some have reached out to the Labour Department to seek recourse, local media reported.
The government in July took the unusual step of appointing a special inspector from the Securities and Futures Commission to investigate the embattled company. The Finance Reporting Council launched a separate probe into Next Digital and its auditors Deloitte and CCTH CPA Limited over the company’s accounts during a period that predates the national security law.