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Day 71: May 7, 2024

The Witness: Live Update | Day 71 of the Jimmy Lai Trial: Chan Tsz-wah: Once considered stopping actions but was persuaded by Lai

Next Digital founder Jimmy Lai and three related companies of Apple Daily are charged with “conspiracy to collude with foreign forces” and other offenses. The case commenced its 71st day of trial on Tuesday (7th) at the West Kowloon Magistrates’ Courts (acting as the High Court). The fifth “accomplice witness,” Chan Tsz-wah, testified for the thirteenth day, after which the prosecution is expected to call Royston Chow Tat-kuen, former COO and CFO of Next Digital, to testify.

Previously, Chan was asked whether he intended to continue activities known to violate the National Security Law after its enactment. Chan responded that his decision “depended on who was around him” and that if others were still “working hard,” such as Andy Li and Jimmy Lai, “all working hard for Hong Kong, I think I would end up doing it too.” Today, under further questioning by the defense, he added that he had expressed fear in June 2020 when he met Jimmy Lai and wanted to withdraw, but was ultimately persuaded by Lai to continue his actions.

The case is being presided over by High Court judges designated under the National Security Law: Esther Toh Lye-ping, Susana Maria D’Almada Remedios, and Alex Lee Wan-tang. The prosecution team includes Deputy Director of Public Prosecutions Anthony Chau Tin-hang, Assistant Director of Public Prosecutions Ivan Cheung Cheuk-kan, and Senior Public Prosecutor Crystal Chan Wing-sum; Jimmy Lai is represented by Senior Counsel Robert Pang Yiu-hung, barrister Steven Kwan, and Marc Corlett, a New Zealand King’s Counsel practicing in Hong Kong.

16:27 Court adjourns.

15:54 Chow confirms Lai transferred a company under his name to Chan Tsz-wah

The prosecution questioned further about the company “LACOCK,” noting that from April 2018 to January 2020, Lai, Mark Simon, and Chow were authorized signatories for “LACOCK,” and starting from January 2020, Chan Tsz-wah became the sole authorized signatory. Chow confirmed, and noted that “LACOCK” is an offshore BVI (British Virgin Islands) company, “I remember this company wasn’t active,” with directors including himself and Lai.

The prosecution then displayed a series of emails, one of which was sent by Evan Lau to Mark Simon on September 25, 2019, stating, “Pursuant to all previous discussions, it is given to understand that the shares of LACOCK Inc. will be transferred to Mr. Chan Tsz Wah.” Chow stated that Evan Lau was a Dico employee.

The next day, Mark Simon emailed Chow saying, “I will talk with you.” Chow added in court that on that day, Mark Simon came to his office and said, “Because this Chan Tsz-wah has been helping Mr. Lai, Mr. Lai is transferring this company to him as a reward,” Chow did not ask further but then proceeded to ensure the documents were correct to transfer the company “100% to Chan Tsz-wah,” although he did not personally know Chan. Chow confirmed that Chan ultimately became the new shareholder and director of “LACOCK.”

15:40 Prosecution inquires about Lai’s 3-million private expenditure, Chow understands it was used for overseas publicity in 2019.

The prosecution further questioned the content of an email, which included a 3 million yuan expenditure labeled as “Mark’s Project”. Chow stated, “According to my understanding, it was for him to do some projects… I actually understand that in June 2019, there were some overseas publicity efforts or other things,” but Mark Simon did not explain these to him. Chow also mentioned that at the time, Dico had staff prepare more detailed reports for Lai, which Chow summarized into the monthly expenditures, although he personally did not review the invoices, promissory notes, and other documents.

The prosecution then displayed an email sent by Chow to Lai on July 19, 2019, listing the expenditures for June 2019, which included a 100 million loan to Next Digital, and a transfer of HK$ 850,000 to a party in Canada. Chow confirmed this.

15:00 Prosecution inquires about the operations of “Dico” and “Lais Hotel.” 

The prosecution displayed a check issued in the name of Dico on February 24, 2020, to Chan Tsz-wah, involving about HK$80,000. Chow confirmed that the check was signed by him and Mark Simon. Chow recalled that there was a “payment request” approved by Lai, and the accounting team then issued the check, which he signed. The prosecution asked if Lai had informed him why he needed to sign this check, to which Chow replied no.

The prosecution then showed an email found on Chow’s computer, sent by Chow to Lai on June 20, 2019, listing Lai’s private expenditures in May 2019. Chow explained in court that the purpose of the email was “to inform Jimmy Lai about his expenses in May. There were three larger expenditures,” along with daily expenses like labor and vehicles, including one item of 3 million for “Mark’s project.”

Further questioning about the email revealed it included a transfer of US$ 2 million to “Lais Hotel.” Chow explained that the transfer was made to “Lais Hotel” at Mark Simon’s request from Lai’s account.

Regarding Dico Consulting, the prosecution asked whether the company had actual operations or was merely a shell company. Chow described, based on his understanding, that Dico “didn’t really have any substantial business; the company owned some vehicles and a boat, and also had some employees,” implying that Dico likely “didn’t have regular income.” When asked why the company was established, Chow said that Dico had existed for many years, “it was already there many years before I took over,” and confirmed that there were regular expenses like staff, vehicles, and office costs.

14:45, Royston Chow Tat-kuen describes his responsibilities. 

The prosecution asked him to outline his duties as COO, to which Chow stated that he was responsible for “ensuring the entire group could operate” and also handled the group’s advertising and marketing efforts, assisting the CEO, Cheung Kim-hung, in “managing the computer department,” among other tasks. As CFO, Chow dealt with the company’s financial matters and logistics departments, such as administration, distribution, and legal departments. Chow continued, stating he had to report his work to the CEO, the group’s board of directors, and the chairman, Jimmy Lai; at the private company level, such as for Lai’s Consulting and “Lais Hotel,” he had to report to Mark Simon and Jimmy Lai, primarily to Lai, while Mark Simon acted as the “general manager.”

Regarding “Dico Consultants Limited,” Chow mentioned that he was a shareholder of the company, but he held the shares in trust for Lai. The prosecution asked who decided on the financial matters of Dico Consultants Limited. Chow replied, “It’s either Jimmy Lai or Mark Simon,” and for more detailed matters like routine administrative tasks, these were decided by the administrative director Wong Wai-keung.

14:34 Royston Chow Tat-kuen confirms his exemption from prosecution in a fraud case 

Prosecutor Anthony Chau Tin-hang noted that Chow, with a university education, was arrested on August 10, 2020, for fraud and collusion with foreign or external forces to endanger national security, and was released on police bail the following day. On June 17, 2021, Chow was again arrested for collusion with foreign forces and was released the next day; Chow confirmed this.

The prosecution continued, stating that on December 2, 2020, Chow, Jimmy Lai, and Next Digital’s administrative director Wong Wai-keung were charged with fraud for concealing information from the Science Park Company from January 2016 to May 2020. Chow’s case was postponed for further hearing. On February 16, 2022, Chow was exempted from prosecution and issued a ” immunity from prosecution” document, which Chow confirmed. Judge Alex Lee Wan-tang inquired whether Chow would testify in the fraud case, to which the prosecution indicated that Chow had already testified.

The prosecution mentioned Chow’s personal background, noting that he joined Next Digital in 1993 as CFO, served as CFO from 2016 to 2020, and as COO from October 2019 to July 2, 2021. During 2016 to 2021, he was also an executive director and company secretary. The prosecution asked if Chow held the positions of CFO and COO simultaneously, to which he replied, “There was a period when I held both posts.” The prosecution further noted that Chow resigned as company secretary and COO on July 2, 2021, and stepped down from all positions at Next Digital in September of the same year; Chow confirmed.

12:21 Court adjourns for lunch.

11:55 Chan Tsz-wah completes his testimony. 

In response to the defense’s earlier statement about planning to cross-examine the police officers who had visited Chan Tsz-wah, Judge Alex Lee Wan-tang expressed concern whether the defense should pose the same questions to Chan to avoid having to recall him for questioning after the police witnesses had testified. After a brief recess, senior barrister Robert Pang Yiu-hung informed the court that the defense had no further questions.

Judge Esther Toh Lye-ping then addressed a previous mention by Chan of a YouTube clip involving Jimmy Lai. Toh asked Chan about the content of that segment. Chan replied, “It’s generally about Jimmy Lai himself, saying he is not afraid, he feels a sense of mission, and will continue to do what he thinks is right.” Both the prosecution and defense indicated they had no questions, and Toh informed Chan that he had completed his testimony. As Chan left the courtroom, he looked towards Jimmy Lai, who appeared calm.

In the afternoon, the prosecution will call Royston Chow Tat-kuen, the COO and former CFO of Next Digital Group, to testify.

11:18 Court adjourned

10:47 Chen says that he had considered stopping his activities, but was persuaded by Lai to continue 

Regarding Chen’s earlier statement that after the implementation of the National Security Law, Lai promoted the “Hong Kong Safe Harbor Act” in the United States, arranging interviews with think tanks and foreign political and economic figures, Chen mentioned under cross-examination that during their sixth meeting at the Next Media Building, Lai expressed his intention to strive for “tighter measures to see if they could help the youth” in the U.S., and later learned from Mark Simon that the act was the “Hong Kong Safe Harbor Act,” assisted by the U.S.-based “Hong Kong Democracy Council” (HKDC).

As for Chen’s mention that Lai had arranged interviews with think tanks and foreign dignitaries, Chen confirmed he did not participate in these programs nor knew the content of the interviews, and was unaware if Lai mentioned sanctions therein.

When asked earlier if he intended to engage in activities known to violate the National Security Law after its enactment, Chen had responded that his thought process depended on “who was around him.” If others, like Andy Li or Jimmy Lai, whom he knew and who were “working hard” for Hong Kong, were still active, “I guess I would end up doing it too.” Chen also mentioned knowing that Lai was still “working hard” for Hong Kong.

The defense further inquired, so his decision on whether to plan to violate the National Security Law would depend on Lai’s actions? Chen explained, “One of my considerations would be whether the people involved in this matter with me would continue. Personally, at that time, because I met Jimmy Lai in June, I had already expressed my fears and my wish to back out, but I was persuaded by him, so I continued afterward.”

Chen added that he joined the U.S. line in July to August 2020, describing the international line as “something that needs to be managed,” “a thing that takes time.” Therefore, after the National Security Law took effect, he also joined the U.S. line, “I think at that time I was no longer too concerned about whether others would continue, because I had already broken the law.”

Judge Alex Lee Wan-tang further inquired if Chen’s potential violation of the National Security Law would depend on whether others also broke the law. Chen replied that “I think it’s one of the considerations,” confirming that he would consider Lai’s actions calling for sanctions after the National Security Law.

10:30 Defense requests Chen to identify articles about sanctions mentioned by Lai after the National Security Law was implemented. Chen replied, “I can’t remember.” 

Judge Alex Lee Wan-tang further inquired about how many related links Chen had received at that time. Chen responded, “I received a lot,” and mentioned that there were numerous links regarding Lai, “Certainly more than one, but as far as I can recall, there was only one article that caught my attention in the group.” Chen confirmed that he received links to related articles after the National Security Law came into effect.

Regarding links to interview clips, Chen said he received these after the implementation of the National Security Law because a netizen who does translation work for Apple Daily had discussed this show with him, so he knew the program aired after the law was enforced. Chen continued, but could not remember if others were involved in the interview program or if Lai was the host. He added that the person who reposted the clip link mentioned in the message that the segment hoped foreign governments would restrict China’s economic development.

Chen also mentioned that around September 2020, he saw a clip on YouTube where Lai told reporters in another interview, “He’s not afraid of anything; he will continue to do what he thinks he should do.” The defense asked if Chen could identify the articles and interviews where Lai advocated for sanctions after the National Security Law. Chen said he could not, “because I can’t remember.”

10:10 Defense requests that Chen clarify how he knew that Jimmy Lai continued to call for sanctions

Chen stated on Monday that he saw online that Lai was calling for sanctions. Although he did not read the articles, he saw article links on Telegram, with headlines indicating a hope for more foreign countries to sanction the Hong Kong government. Chen confirmed his belief that Lai would call for sanctions, mentioning that “Mark Simon told me he’s still at it.” The defense followed up on this matter on Tuesday, with Chen reiterating that his knowledge of Lai’s continued calls for sanctions wasn’t solely from reading Lai’s articles or interviews. He admitted, “If it were only from articles and interviews, there’s a lot I haven’t seen.”

The defense asked Chen to clarify his statement. Chen explained that when someone reposts a link on Telegram, it displays not only the headline but also a summary of the clip or article, “And if you ask me if I got such an impression just from the headline, I’d tell you no.” The defense inquired further if Chen had any related article or clip links. Chen said he had none and also forgot who reposted the link, but remembered that the message mentioned “new messages or intelligence online internationally,” and believed the article was from Apple Daily.

Judge Esther Toh Lye-ping was concerned about how Chen received the link. Chen explained that it was a message from a promotional group, noting, “At that time, many people, especially those on the international line,” predominantly used Twitter, although he did not. He added that on the international line, “it’s not just Jimmy Lai; there are many different political figures, scholars, KOLs, who are active,” and that people often repost messages about the international line in the TG group.

10:03 Court session begins

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