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Day 73: May 9, 2024

The Witness: Live Update | Day 73 of the Jimmy Lai Trial: Defense Begins Cross-Examination of Royston Chow Tat-kuen

Next Digital founder Jimmy Lai and three associated companies of Apple Daily are charged with “conspiracy to collude with foreign forces” among other offenses. The case proceeded to its 73rd day of trial on Thursday (9th) at the West Kowloon Magistrates’ Courts (acting as the High Court). Witness for the prosecution, Royston Chow Tat-kuen, COO and former CFO of Next Media, testified for the third day. The prosecution completed their direct examination, and the defense began their cross-examination, starting with questions about the “Lunchbox Meetings” and records from Apple Daily’s work platform Slack.

Previously, Chow stated that since his tenure as COO, he participated weekly in the “Lunchbox Meetings” hosted by Lai, which dealt with topics related to the anti-government movements and “black violence,” with Lai giving directions. Chow also noted that Apple Daily launched an English version and initiatives like “One Person, One Letter to Save Hong Kong,” which drew international attention to Hong Kong’s anti-government actions, “or what they call ‘police brutality,’ thereby hoping to gain foreign support, or even more intensely, sanctions.”

The case is 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. Representing the prosecution are 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 with a Hong Kong practice license.

16:21 Court Adjourns

16:00 Defense Completes Cross-Examination of Royston Chow

The defense pointed out that from 2001 until the closure of Apple Daily, Jimmy Lai received approximately 1.9 billion in dividends, which Chow agreed to. The defense continued, stating that Lai only made shareholder loans to Apple Daily from 2019 until its closure, which Chow also agreed to. The defense asked if it is natural and usual for a founder and shareholder to make a shareholder loan to their profitable company, to which Chow replied, “It’s not necessarily common in publicly listed companies.” The defense further questioned if making a shareholder loan to a company was unspeakable or evil, to which Chow responded, “It shouldn’t be.”

The defense stated that they had completed their cross-examination, and the prosecution would cross-examine on Friday (10th). Additionally, regarding the defense’s application to recall Cheung Kim-hung to testify, Judge Alex Lee Wan-tang requested the defense to explain, after Chow’s testimony, why they did not point out the Slack records to Cheung at the time, but are now able to do so.

15:10 Defense: Was Apple Daily Targeted by Leung Chun-ying Leading to Reduced Ad Revenue? Chow: Cannot Quantify

The defense noted that after Jimmy Lai resigned as the chairman of the group in December 2014, Next Digital’s losses increased, and decreased after he resumed leadership in 2018; Chow agreed. The defense showed Next Digital’s financial situation from 2019 to 2020, pointing out increased losses due to the anti-extradition bill protests and the COVID-19 pandemic? Chow responded, “That’s correct, and also when we started the online subscription system.”

The defense asked if, for general media, advertising fees are one of the main sources of income? Chow stated, “For print newspapers, yes.” The defense pointed out that from 2002 to 2017, advertising revenue was 1.6 to 2 times higher than newspaper sales, to which Chow responded, “1.6 to 2 times is about right, but whether it goes up to 2017, I’m not sure.” The defense continued that the advertising fees dramatically dropped in 2019 to 2020, less than newspaper sales, Chow agreed.

The defense asked if the sharp drop in advertising fees was due to former Chief Executive Leung Chun-ying targeting Apple Daily. Chow said, “I think I can’t quantify that, I’m not the decision-maker in placing ads.” The defense further pointed out that Leung Chun-ying used his social media to single out and criticize advertisers who placed ads in Apple Daily, to which Chow said, “I have heard about it, but I have never personally visited the website.”

The defense asked, when ad revenue significantly decreased, was there a need to find other sources of income? Chow said this is something the company must do, such as including online advertising and subscription revenue in the reports. The defense asked about the strategy for 2019 to 2020, did Next Digital try to sell as many newspapers as possible? Chow stated, “In print media, we always hope to sell more printed publications,” agreeing that special issues included with the newspaper could help daily sales but were not a long-term solution.

14:33 Defense Questions Next Digital’s Finances

The defense questioned about Next Digital’s finances, referring to the ten-year period starting from 2001, during which Next Digital reportedly earned 2 billion. Does that sound correct? Chow responded, “I haven’t actually calculated it myself.” The defense showed Chow summaries of profit and loss for the fiscal years from 2001 to 2010, along with a calculator, mentioning that except for losses in 2003 and 2010, all other years were profitable, totaling over 2 billion? After calculating in court, Chow agreed.

The defense noted that 2003 was the year of SARS, so it was normal to have losses that year? Chow mentioned, “That year, besides SARS, Apple Daily was also launched in Taiwan,” hence there were related expenditures. The defense pointed out that with Next Digital developing operations in Taiwan, navigating through SARS and the 2008 global economic crisis, and still earning 2 billion in profit, it shows that under Lai’s leadership, Next Digital was a successful company? Chow agreed.

The defense also noted that Next Digital faced challenges due to the global decline in print media, to which Chow agreed. The defense asked if Next Digital, starting from 2001, aimed to diversify its revenue streams? Chow stated, “Print media was declining at that time, and the internet business was still, should be, undeveloped, I think I need to look at the report to know if there was any revenue yet.”

13:04 Court adjourns for lunch.

12:25 Chow Disagrees That “Lunchbox Meetings” Were Mainly About Business Development

The defense inquired about the “Lunchbox Meeting” on December 6, 2019, which discussed challenges in newspaper advertising and how to increase ad sales, asking Chow if he remembered? Chow responded, “Honestly, I don’t remember until I see these printouts which jog some memory.” He believed he had attended that day’s meeting but did not remember if Lai was absent that day. Chow then reviewed the Slack records, confirming his attendance and Lai’s absence. The defense further asked if the “Lunchbox Meetings” without Lai were hosted by Ivan Cheung? Chow agreed.

The defense asked if the matter of offering discounts to small stores for advertisements was first raised at that “Lunchbox Meeting.” Chow stated he did not remember, nor did he recall whether it was Lai or another colleague who proposed it. The defense further questioned if the “Lunchbox Meetings” Chow attended were mostly related to business development, suggesting that these meetings were not for Lai to set editorial directions? Chow disagreed with this characterization.

11:45 Brief Recess

11:18 Defense Questions About “Lunchbox Meetings”

The defense focused their questioning on the “Lunchbox Meetings,” particularly on Chow’s statement that “attendees would pose questions on WhatsApp before the meetings, and Lai would usually reply ‘Let’s discuss it then.'” The defense pointed out that the channel for employees to raise questions was not WhatsApp, but Slack? Chow clarified, “The correct way to put it is that for a while it was through Slack, and then it switched to WhatsApp.”

The defense asked if he had any recollection of the Slack interface? Chow responded, “A slight recollection, only used it for a short period.” The defense then showed the Slack interface, and Chow said, “I believe it is.” The defense further displayed the “HK Apple Newspaper Ads” Slack group, and Chow confirmed he was a member of the group since its inception.

The defense noted that after questions were raised on Slack, there would be face-to-face meetings followed by someone drafting the meeting minutes; Chow confirmed. The court was shown a post by CEO Cheung Kim-hung on Slack titled “Today’s Lunch Meeting Highlights and Follow-up,” which mentioned “Apple’s website has many video talk topics,” and “Under the resistance movement, many small stores are affected, we could offer discounts to small stores in the newspaper.”

11:09 Defense Begins Cross-Examination of Royston Chow Tat-kuen

Royston Chow Tat-kuen took the stand, and Senior Defense Barrister Robert Pang Yiu-hung began the cross-examination. Regarding Chow’s statement that the Canadian company “Lais Hotel Properties Limited” was owned by another company of Jimmy Lai, the defense suggested that “Lais Hotel” was actually held by a trust? Chow responded, “I’m not too clear on this, but I know Mr. Lai paid for those hotels and he gave instructions on how to operate them.”

The defense then asked if Chow was the Trust Protector of that trust. Upon hearing this, Judge Alex Lee Wan-tang asked if the Trust Protector meant the same as Trustee? The defense clarified they are different. Chow pondered for a moment and then stated he was unclear whether “Lais Hotel” was held by a trust.

10:15 Defense Seeks to Present Apple Daily’s Work Platform Records; Judge Concerned About Potential Forgery

Senior Defense Barrister Robert Pang Yiu-hung indicated that he had prepared records from Apple Daily’s work platform Slack, some contents of which had previously been pointed out to the prosecution witness Chan Pui-man, as well as annual reports from Next Digital from 2001 to 2021. Judge Susana Maria D’Almada Remedios asked why the records start from 2001. Pang explained that it was the year Apple Daily was incorporated into Next Digital. Judge Remedios also expressed concern about the admissibility of the Slack records, noting they were obtained by the defense, and the prosecution had not yet seen them? Pang agreed and chose not to disclose the source, but emphasized that they could be submitted as evidence.

Judge Esther Toh Lye-ping also noted that if the Slack records could potentially be forged, the prosecution might object to their submission, questioning the appropriateness of the defense’s approach. Pang planned to show the Slack records to witness Royston Chow Tat-kuen, since he had claimed to attend all “Lunchbox Meetings” after becoming COO, believing it would help him remember; if Chow did not recognize the content of the records, the defense would not pursue further. Prosecutor Anthony Chau Tin-hang mentioned that he had received the relevant documents only a minute earlier, prompting Judge Toh to adjourn the session to allow the prosecution to review the documents.

After reviewing the documents, the prosecution pointed out that some Slack records were from 2018, before Chow’s tenure as COO, considering them irrelevant to Chow; Pang stated that he would only ask about records during Chow’s tenure as COO.

10:11 Court session begins

The Witness

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