Next Digital is owned by jailed tycoon Jimmy Lai and was the publisher of Apple Daily, a popular pro-democracy newspaper that closed in June after its newsroom was raided by police officers investigating whether some articles breached a national security law introduced in Hong Kong by Beijing last year.
In a filing to the Hong Kong bourse late on Sunday, Next Digital said the best interests of shareholders, creditors, employees and other stakeholders will be served by an orderly liquidation.
Ip Yut Kin had tendered his resignation as a non-executive director and chairman, while Louis Gordon Crovitz, Mark Lambert Clifford and Elic Lam have tendered their resignations as independent non-executive directors, the company said.
The company’s CEO, who was arrested at the time of the raid related to the security law breach investigation, and its chief financial officer had resigned in July.
Next Digital said it hoped the resignations of the remaining board members will result in liquidators being allowed by the Hong Kong government to authorise payments that directors were banned from approving, including for creditors and former staff.
It also said it hoped that liquidators will be able to conclude value-creating transactions that would generate funds to benefit creditors.
Climate of fear
The company said the Hong Kong government has never indicated which articles published by Apple Daily allegedly violated the national security law, and the uncertainty created a climate of fear, resulting in many resignations including those responsible for the regulatory compliance duties of the publicly-traded company.
“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,” it said. “Under this new law, a company can be forced into liquidation without the involvement of the courts.”
“As Apple Daily often observed, Hong Kong people have a collective memory of what life was like elsewhere when freedom of speech was denied: No other rights are safe,” it said.
Authorities have denied the erosion of rights and freedoms, including the media, in Hong Kong, but said acts that endangered China’s national security crossed a red line. Security officials have said law enforcement actions are based on evidence and have nothing to do with an individual’s background or profession.