Although Apple Daily, the raucous, popular tabloid known for its anti-Beijing views, says it can continue operating despite various punitive actions against its now-jailed proprietor Jimmy Lai (above, definitely going down), there are questions on how much longer any independent journalists can remain in Hong Kong, as the National Security Law chills the city’s rambunctious media.

Lai himself was sentenced to another 14 months in prison today (May 28) by District Court judge Amanda Woodcock for helping to organize an October 2019 protest that was deemed an illegal protest. This is in addition to the 14-month jail sentence which he is currently serving. At age 72, as one of the territory’s most visible democracy advocates, it is uncertain if he will ever get out of jail without international pressure. Sources speculate Beijing will continue to invent reasons to keep him in prison well beyond these two terms.

The actions against Apple Daily and its parent company Next Digital, raise more troubling questions for Hong Kong’s international business community. That relates to the May 14 notices issued by Security Secretary John Lee to unilaterally freeze Lai’s 71.26 percent stake in the Hong Kong-listed Next as well as bank accounts of three companies he owns, which together are estimated to be worth HK$500 million (US$64 million).

Beijing imposed the National Security Law in the middle of 2020 to quell protests that rocked the city in 2019 and 2020.

“Experienced lawyers have told me the government is on the cusp of creating chaos in Hong Kong’s common law system,” said a Hong Kong-based ex-banker. “Seizing Lai's stake without a trial or due process represents a threat to all legitimate businesses.”

This incident, the source said, “will create self-censorship not only in newspapers, but any criticism of Chinese companies and deals by banks' investment research. It represents a dangerous precedent. What will come next?”

On May 27, Secretary Lee was asked about a Reuters report that he had sent letters to Lai and two major banks, HSBC and Citibank, threatening jail for anyone who deals with Lai’s accounts. The reporter asked Lee whether this action would harm Hong Kong's reputation as a financial center and spark an exodus of bankers.

Lee did not deny the Reuters story but answered, “As regards my written notice to companies and institutions regarding property which is offence-related property under the national security law, I am exercising the power because Lai has been charged with two offenses of collusion with other country or external forces to endanger national security.”

In his reply, Lee tried to separate the security law from the business activities of Apple Daily and Hong Kong. Lee said, “Normal businessmen will go about their duties and have nothing to do with endangering national security, and we should not associate the two matters.”

On May 27, Next Digital’s share price nearly quadrupled at one point before closing 50.5 percent above its most recent closing price after the company announced it had sufficient funds to continue operating Apple Daily. Trading of Next Digital’s shares had been halted on May 17 and resumed on May 27.

On May 26, Next Digital issued an announcement saying the company’s working capital is sufficient for at least 17months without additional funding from Lai.

Next’s statement is “sending a message that they will not be cowed,” said Evan Fowler, an associate of the Henry Jackson Society, a UK security and foreign policy think tank.

However, on Facebook on May 27, Leung Chun-ying, a strongly pro-Beijing former chief executive, hinted that Apple Daily’s future may not be so rosy. “Although Apple Daily said it has more than HK$500 million in cash,” Leung wrote, “the reality is the company has total liabilities of HK$694 million. Going forward, will banks call in their loans and suppliers continue to allow credit (for Next Digital)?”

Next Digital is able to operate with minimal input from its jailed owner, but the security law and Lai's conviction will have an impact on the company's ability to finance itself, Fowler warned. “Influential Hong Kong supporters have been silenced and will be reluctant to work with Next.”

Secondly, he said, “the company knows it is as much a target as Mr Lai. Editors and journalists know this, and this will affect their decisions and the work that they do. Thirdly, Next is operating in a very different and rapidly evolving media environment that poses significant and potentially overwhelming challenges to Hong Kong media. Arguably no media outfit in the city is operating ‘normally’.”

Benedict Rogers, chief executive of Hong Kong Watch, a UK watchdog NGO, said on May 14 that Beijing’s decision to freeze Lai’s assets without due process under the national security law is an abuse of power. (Hong Kong Watch’s patrons include Chris Patten, the territory’s last British governor.)

“This decision undermines the rule of law and vandalizes Hong Kong’s status as an international financial center,” Rogers said. “After today, nobody can be certain who next will have their assets in Hong Kong arbitrarily seized under the National Security Law.”

Official Hong Kong doesn’t agree. The government-owned broadcaster RTHK on May 18 tweeted: “Chief Executive Carrie Lam says freezing the assets of jailed media tycoon Jimmy Lai strengthens Hong Kong’s status as a global financial hub. Suggests that it actually undermines the city’s position are merely “attacks” from western media, she says.”

That drew a wealth of sarcastic comment. One netizen tweeted in reply, “Comrade Carrie’s ignorance of how markets function is troubling whilst her inane comments are unwise and irresponsible.”

Another netizen asked, “What drugs is Carrie Lam on? How’s freezing an innocent man’s assets able to boost the confidence of other investors?”

A Canadian consultant told Asia Sentinel, “I don’t think the action taken under the national security law will enhance the view that it is business as usual for the press in Hong Kong, but that is also a two-way street. Journalists today editorialize or edit the news to facilitate a specific narrative rather than report all sides of a story.”

“When media strays from the precepts of responsible journalism into the realm of inciting or affecting political change by distortion of facts, then they should be prepared to be held accountable. Perhaps Jimmy Lai learned that lesson far too late,” the consultant said.

Apple Daily, Fowler said, “is a tabloid. It has a reputation for playing loose with the facts and for provocative stories. It will not hold back because this has never been its style. However, this does not mean there will not be a chilling effect, rather that it is likely to manifest … in how far individual editors and journalists are prepared to go.”

“The writing is on the wall, not only for Apple but for journalism as we knew it in Hong Kong,” Fowler said.