Jimmy Lai trial: Apple Daily’s parent firm narrowed its losses in lead up to its closure, court hears
Hong Kong Free Press
The parent company that owns the Apple Daily newspaper saw an improvement in its financial situation in the months ahead of a police raid, arrests, and its eventual shutdown, the national security trial of media mogul Jimmy Lai has heard.
Royston Chow, the former chief financial officer of Next Digital, took to the witness stand for the third day on Thursday.
He was arrested under the national security law in June 2021 alongside Lai and other Apple Daily executives, but was granted immunity by the prosecution in exchange for testifying against the tycoon in the present trial and in a separate fraud case.
The defence began its cross-examination of Chow after the prosecution completed their questioning on Wednesday.
Representing Lai, barrister Robert Pang said it had prepared extracts of Next Digital’s annual reports dating back to the 2001/02 financial year. He told the court he picked that year in particular because it was then that Apple Daily was ‘injected” into Next Digital.
According to the extracts of the annual reports shown by Pang, Next Digital made losses for five consecutive financial years starting from 2015/16.
Its latest report before Apple Daily shuttered in June 2021 was an interim report for the 2020/21 financial year, which covered the six-month period until the end of September 2020. A financial statement in the report showed that the company recorded a loss of HK$146 million in that period.
The figure is less than half of the losses recorded in the same timeframe the year before. In the six-month period until the end of September 2019, the company made a loss of HK$313 million.
“You’d agree the loss had reduced very substantially?” Pang said, to which Chow said yes.
Pang also presented figures showing that Next Digital’s financial position “took a turn for the worse” after Lai resigned as chairperson of the company in December 2014. Before that, the company had been making profit.
‘Lunchbox meetings’
Thursday marked the 73rd day of Lai’s national security trial, in which the media mogul has been charged with two counts of conspiring to collude with foreign forces and one count of conspiring to publish “seditious” materials.
The trial – which began in mid-December – was initially slated to take 80 days, meaning it would wrap up this month. But Pang told the court on Monday that he estimated the trial might be “going into early June,” citing plans to play 35 hours of an interview show hosted by the tycoon on Apple Daily as well as summon six or seven police officers to testify.
Earlier on Thursday, the defence also questioned Chow about “lunchbox meetings” that were held. The court has heard in previous trial hearings that employees were invited to raise questions ahead of time, which would then be discussed at meetings led by the company’s management.
Pang showed the court screenshots of a channel in messaging app Slack, which the court heard staff had used to communicate matters related to the lunch meetings. Chow confirmed that he was a member of the Slack channel.
When asked if he had attended one particular lunch meeting on December 6 2019, Chow initially said he did not remember. But after Pang gave him time to review the screenshots and “refresh his memory,” Chow said he now recalled that he had.
Pang suggested that attendees of the meeting discussed the difficulties encountered in print advertising, and asked Chow whether he remembered if the idea of soliciting advertisements from small shops was mentioned for the first time in the meeting.
The witness said he did not remember that this was discussed, and was only now being reminded of it by looking at the records.
“Are you able to recall whether the idea of supporting small shops came from Lai or other colleagues at Next Digital?” Pang asked.
Admissibility of Slack records
Pang completed his cross-examination of Chow on Thursday afternoon. The former finance officer will return to the witness stand on Friday, when the prosecution will re-examine him.
On Wednesday, Pang told the court that his team would apply to call former CEO of Next Digital Cheung Kim-hung to the stand again. Cheung, who was charged alongside Lai on one count of conspiring to collude with foreign forces, pleaded guilty to the offence and became a witness for the prosecution. He testified against Lai in January.
The barrister said he hoped to present to Cheung with the Slack records, which he did not have before.
Alex Lee, one of the three handpicked national security judges presiding over the trial, said Pang “really need[s] to explain why those records were not available then but available now.”
“We will try to comprehensively answer all the questions the bench might have,” Pang replied.
Before Pang began his cross-examination of Chow on Thursday morning, the barrister told the court he would be displaying those records to Chow, which were new to the court and which the prosecution had not seen before. The judges cast doubt over the records’ admissibility.
Beijing imposed a national security law in Hong Kong in June 2020 following months of protests and unrest against a controversial extradition bill. The law criminalises subversion, secession, foreign collusion and terrorism.
The 76-year-old media mogul, who has been detained since December 2020, stands to face up to life in jail if convicted.
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