Jimmy Lai, the founder of defunct pro-democracy tabloid Apple Daily, has been sentenced to five years and nine months in jail after being convicted of fraud. Lai – who is also facing a national security trial – was found to have breached the terms of lease of the newspaper’s headquarters after concealing the operation of a consultancy firm at the building.

Wong Wai-keung, who was the administrative director of Apple Daily’s parent company Next Digital, was sentenced to 21 months.

Apple Daily’s headquarters in Tseung Kwan O. File photo: Studio Incendo.

Lai, 75, and Wong, 61, appeared in front of Judge Stanley Chan at the District Court on Saturday morning.

Lai was found guilty of two counts of fraud on October 25. He has been in custody since December 2020, and also faces charges under the colonial-era sedition legislation and security law.

The court ruled that Lai had violated the terms of the lease for Apple Daily’s headquarters by concealing the operations of Dico Consultants Limited (Dico) from the landlord, the Hong Kong Science and Technology Park Corporation (HKSTP), from April 1, 1998, to May 19, 2020. The lease had specified that the premises should be used for printing and publishing newspapers or magazines only.

Wong was convicted of one count of fraud with regards to the period between January 1, 2016 and May 19, 2020.

‘Wrong understanding’

When handing down his ruling on Saturday, Chan said that claiming that the consultancy firm only took up a small part of the building was a “wrong understanding” of the nature and seriousness of the charge.

The judge also said that Lai had “used the media organisation as a protective umbrella” for the offence, such that HKSTP would not dare launch an investigation against the firm.

While Lai’s team said that the chief operating officer was to blame for the offence, and that the media tycoon did not deal with the contract between HKSTP and the company, the judge said that it was not a defence. Judge Chan also listed six reasons for a heavier sentence, including the “intangible benefits” that Lai had gained from having the consultancy company nearby, and that HKSTP was not notified of the existence of the firm.

Stanley Chan. File photo: Judiciary.

Chan set a starting point of five years imprisonment for the first fraud charge, and three years for the second charge.

The judge ruled that one year of the jail term for the latter charge was to be served consecutively, and also applied a three-month deduction as the media tycoon agreed to the majority of the prosecution’s case and had saved court resources.

Chan also handed an eight-year disqualification order to Lai, and ordered the media tycoon to pay HK$2 million in fines, calculated by the possible rent that the consultancy company had saved by not having to pay market-level rent.

As for Wong, the judge said that while the defendant claimed to not have any decision-making power, and was only following his superiors’ orders, Wong still facilitated Lai in committing the offence.

Chan, when announcing Wong’s sentencing, said that while the defendant’s background and illness would make people empathise with him, the court still had to “strike a balance” between public interest and Wong’s situation, and that the sentence had to serve as a deterrent.

The judge said he believed that Wong did not commit the offence for personal gain, and set a sentencing starting point of 30 months imprisonment.

After deducting three months – as Wong saved court resources by agreeing to a large part of the prosecution case – and another deduction considering Wong’s illness and lack of criminal record, Chan handed a 21-month prison term to the ex-administrative director.

Conviction

Both Lai and Wong pleaded not guilty to their charges. The court heard from Lai’s defence lawyer Derek Chan that the case should be handled as a civil matter instead of a criminal one.

Photo: Almond Li/HKFP.

However, the judge ruled that Lai was aware of the need to apply for a license from HKSTP to allow Dico to operate at Apple Daily’s offices. Lai did not do so because he “must have thought that Dico did not meet the licensing conditions.”

Meanwhile, the barrister representing Wong Wai-keung, Maggie Wong, argued that her client was unaware of Dico’s situation.

But the judge said he could not accept that the ex-chief operating officer did not know of the nature of businesses operating at Apple Daily’s premises after working there for over 20 years, adding that the lease violation was “obvious.”

Mitigation

During mitigation, Lai’s lawyer asked the court to consider the media tycoon’s advanced age, his primary school level of education and his hard work in becoming a “rags-to-rich” entrepreneur.

The court also heard that Apple Daily had been “important” in Hong Kong’s media history and development. In addition, the senior counsel said Dico only occupied 0.16 per cent of the office complex.

Wong Wai-keung’s lawyer asked the court to suspend her client’s sentence, citing his physical and mental condition, as well as his lesser role in the fraud charge.

The 61-year-old has been suffering from heart disease and serious hearing loss, and has developed a major depressive disorder because of the fraud case, the court was told.

Jimmy Lai. File photo: Supplied.

Next Digital’s former chief operating officer Royston Chow was initially charged alongside Lai and Wong, before he became a witness for the prosecution. The court earlier ruled that Chow’s case would be handled separately in March, as he will also testify as a prosecution witness in Lai’s national security trial, which has been adjourned to await Beijing’s interpretation of the security legislation.

Apple Daily folded in June 2021 after Lai and several other senior staff were charged under Beijing’s sweeping national security legislation. Six former staff members of Apple Daily and its parent company Next Digital pleaded guilty to conspiracy to commit collusion last month.

“Illegal demonstration, fraud, national security crimes—the diversity of the charges held against Jimmy Lai, and the staggering severity of the sentences imposed on him, show how desperate the Chinese regime is to silence this symbolic figure of press freedom in Hong Kong,” says Cédric Alviani, Reporters Without Borders (RSF) East Asia chief, urging for Lai’s release.

Maya Wang, associate Asia director at Human Rights Watch said: “Beijing’s elaborate criminal case against Jimmy Lai is a vendetta against a leading proponent of democracy and media freedom in Hong Kong. The authorities should drop the case against Lai and free him immediately.”

Chan, towards the end of the hearing, said that the case was a “simple fraud case” and should not be viewed politically, adding that he did not intend to crack down on press freedom using the case. The judge also said that “everyone is equal before the law,” and that no one could escape responsibility because of their status.

“…a media tycoon who is controlling a large-scale media network and physical news paper does not mean that he will not violate the law because he has the fourth estate, and it cannot be said that when law enforcement prosecute this media tycoon equals to attacking press freedom,” said the judge.

Saturday marks UN Human Rights Day.

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Peter Lee

Peter Lee is a reporter for HKFP. He was previously a freelance journalist at Initium, covering political and court news. He holds a Global Communication bachelor degree from CUHK.