HK police force suspends Jimmy Lai's voting rights at Next Digital

Hong Kong media mogul and controlling shareholder of Next Digital Jimmy Lai can no longer exercise his voting rights at the company, according to a statement from the company.

In the statement, Next Digital said it received a letter from the National Security Department, confirming that Lai must not directly or indirectly exercise the voting rights in relation to any shares in the company held by him except under the authority of a license granted by the Secretary for Security John Lee. 

Meanwhile, as Lai is a shareholder of the company but not a member of the board of directors, Next Digital said that "the prohibition of exercise of the voting rights in relation to any shares in the company held by him is not expected to have any impact on the operational and financial performance of the company".

Currently, Lai owns about 1.88 billion shares of the Next Digital or 71.26% of the total. Holders of remaining shares in the company can continue to exercise their voting rights at general meetings, enabling Next Digital to convene its general meetings in near future. 

Lai has been accused of collusion with a foreign country under the National Security Law. He was also charged with two counts of conspiracy in April. Last week, Lai was sentenced to 14 months in prison for organising an illegal rally on National Day (1 October) two years ago.

Prior to that, the Security Bureau froze about HK$500 million (US$64.4 million) of Lai’s assets last month, including his stake in Next Digital, publisher of Apple Daily, as well as the local bank accounts of three other companies that he owns. Also, the Hong Kong government warned that Lai’s bankers dealing with his frozen accounts could be sent to prison for up to seven years.

According to Next Digital's latest interim report, it recorded an unaudited consolidated loss of HK$146.3 million (US$18.8 million) for the six-month period ended on 30 September 2020, compared with a loss of HK$313.3 million (US$40.4 million) in the same period of the previous year, representing a decrease in the loss amount of 53.3% or HK$167.0 million (US$21.5 million). However, the total revenue was HK$126.8 million (US$16.3 million) during the period under review, representing an increase of 5.1%

Of this, advertising revenue accounted for HK$31.7 million (US$4.09 million), representing an increase of 48.1% or HK$10.3 million (US$1.33 million) compared to the same period of the previous year.