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Hong Kong media mogul Jimmy Lai's sentence casts chill over relaunch, analysts say

"If you can't say anything anyway, then you might as well locate in mainland China."

By Cheryl Tung for RFA Cantonese 2022.12.12 -- The sentencing of Hong Kong media tycoon Jimmy Lai to five years and nine months in jail for fraud over the weekend is a further blow to attempts to restore the city's reputation as a financial and business hub, analysts told Radio Free Asia.

Lai faces disqualification from the directorship of any company for eight years and fines of HK$ 2,000,000 (US$257,000). His assets and those of Next Digital have been frozen pending his trial on a separate charge under Hong Kong's national security law, which forced the company to shut down in June 2021.

His sentence, which will likely be added to any future jail term under the national security law, was condemned by two press freedom groups as further proof of the ruling Chinese Communist Party's clampdown on the city's once-free media.

"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," CĂ©dric Alviani, East Asia bureau chief of the Paris-based press freedom group Reporters Without Borders, said in a statement.

Alviani called for Lai's immediate release "alongside all other journalists and press freedom defenders detained in Hong Kong and in [mainland China]."

The International Federation of Journalists echoed Alviani's comments, and called on the international community to "condemn the destruction of independent media in Hong Kong and to support journalists and media workers fleeing from an increasingly perilous working environment."

'Waste of money'

Lai's sentencing comes as Hong Kong's government under Chief Executive John Lee seeks to relaunch the city as a viable place for global corporations to do business, with Lee launching various talent recruitment and business partnership drives since being selected as the city's leader in an unopposed "election" in May.

He told journalists at the APEC summit in Thailand last month that Hong Kong's new system of Beijing-backed governance "mean[s] extra opportunities for enterprises all around the world."

Lee also wants to relaunch Hong Kong as an IT hub and a regional center for culture and the arts, he said on Nov. 20.

But Herbert Chow, CEO of pro-democracy children's clothing and lifestyle brand Chickeeduck, said Lai's sentence would have likely have a further chilling effect on the rest of the business community in Hong Kong.

"Hong Kong is rapidly losing its advantage" as a destination for investors, said Chow, whose clothing chain is also shutting down following an investigation by the national security police.

"The government claims that Hong Kong is a world city, but when you look at the cases against Jimmy Lai, Shanghai looks like a better bet," he said.

"If you can't say anything anyway, then you might as well locate [your office] in mainland China," Chow said. "Using Hong Kong as a jumping-off point to the mainland is a waste of money, because rents are much more expensive than in mainland China."

Condemned by U.S.

Political risk management consultant Ross Feingold said multinational corporations and foreign business executives will also be weighing their personal and corporate legal risk under the national security law in Hong Kong, and likely reassessing it as a location.

Feingold said there is likely to be a high degree of concern over the sentencing of Jimmy Lai, which was also condemned on Saturday by U.S. State Department spokesperson Ned Price.

"The United States condemns the grossly unjust outcome of Jimmy Lai's latest trial sentencing," Price said via Twitter. "By any objective measure, this result is neither fair nor just."

"We once again call on [the Chinese] authorities to respect freedom of expression, including for the press, in Hong Kong," he said.

British lawmaker Alicia Kearns, who chairs the parliamentary foreign affairs committee, also hit out at Lai's sentence.

"Newspaper owner Jimmy Lai sentenced to 5 years and 9 months for fraud in a political witch trial to hunt down dissent from the CCP regime," Kearns tweeted, in a reference to the ruling Chinese Communist Party.

"Jimmy is a British citizen and must receive vocal support from [the British government]," she wrote.

A Chinese foreign ministry spokesperson in Hong Kong said the U.S. was interfering in Hong Kong's internal affairs.

"We urge external forces to refrain from interfering in the judiciary of the Hong Kong Special Administrative Region, and in any other Hong Kong affairs and China's internal affairs under the pretext of human rights," the spokesperson said in remarks posted to the official website of the ministry's Hong Kong office.

Describing Lai as "an anti-China criminal," the spokesperson accused Washington of "supporting anti-China forces in Hong Kong."

Subletting crime

Lai was handed the jail term by District Court Judge Stanley Chan, who said the subletting arrangement with secretarial contractors Dico Consultants had violated the terms of Next Digital's lease agreement for its premises on the Tseung Kwan O industrial estate.

Chan told the court that Lai and Next Digital had concealed the fact that Lai was allowing the consultancy to operate from a 646-square-foot office in the Next Digital headquarters, and had blamed the error on the company's chief operating officer.

He said Lai, 75, had also prevented the landlord from carrying out checks on the building.

Former Next Digital executive Wong Wai-keung was handed a 21-month jail term after being convicted of the same charge, because he was taking orders from his superiors and hadn't been the "mastermind" behind the operation, the judge said.

Lai's harsh sentence comes amid an ongoing crackdown on pro-democracy media organizations, opposition politicians and peaceful critics of the authorities sparked by the imposition of a draconian national security law on Hong Kong from July 2020 in the wake of the 2019 protest movement.

Lai is still awaiting trial under that law, on charges of "collusion with a foreign power," and is currently also serving shorter jail terms for public order offenses linked to his part in peaceful protests in 2019.

More punishment coming?

There are concerns that the Chinese government may exercise its power under the national security law to hold Lai's "collusion" trial in mainland China, likely leading to a much harsher sentence than might be imposed by a Hong Kong court.

Current affairs commentator Sang Pu, who is also a qualified lawyer, said nearly six years for fraud is a fairly heavy sentence.

"We're very worried that this 75-year-old could spend the rest of his life in prison, given that any further sentence under the national security law will be added to this current sentence," Sang told Radio Free Asia.

"He could wind up serving more than 10 years altogether," he said.

The charge of "collusion with a foreign power to endanger national security" carries a maximum jail term of life imprisonment in cases where the offense is deemed "serious," with a minimum jail term of 10 years.

Translated and edited by Luisetta Mudie. Edited by Malcolm Foster.

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