Jimmy Lai, Next Digital founder, and CEO Wong Wai-keung were convicted in 2022 of concealing violations of the Tseung Kwan O Industrial Estate lease agreement with the Hong Kong Science and Technology Parks Corp.

Lai was sentenced to five years and nine months in prison, while Wong received a one-year-and-nine-month sentence. Both have appealed their convictions, with the case continuing Wednesday at the High Court.

Director of Public Prosecutions Maggie Yang, representing the Department of Justice, argued that any company using the leased premises must apply for a license, placing the responsibility of disclosure on the defendants. She said they concealed the presence of “Dico.” Yang emphasized that the lease was a “special agreement,” granting tenants preferential land rates approved by the Science Park Corp.

The judge, however, noted the significant investments made by the tenants and their contributions to Hong Kong’s economic development, questioning whether the lease solely benefited the tenants.

Yang further argued that Lai was “the person giving instructions and making decisions,” using Apple Printing to commit the offense. The judge raised concerns that if the prosecution’s argument held, Lai and Apple Printing should be considered “joint offenders,” yet the company was not charged. Yang countered that Lai exercised behind-the-scenes control over the involved company, comparing the case to money laundering incidents where implicated companies are not prosecuted.

The Court of Appeal has concluded submissions from both sides and will issue a written judgment within six months.

Appeal Hearing Details

Jimmy Lai and Wong Wai-keung’s Legal Representation and Proceedings

The appellants in the case are Jimmy Lai and Wong Wai-keung. Lai is represented by Senior Counsel Derek Chan and barrister Ernie Tung, while Wong is represented by Senior Counsel Maggie Wong. The Department of Justice is represented by Public Prosecutor Maggie Yang and Senior Public Prosecutor Karen Ng Ka-yuet. The case is being heard by Chief Judge of the High Court Jeremy Poon Shiu-chor, and Court of Appeal Justices Derek Pang and Anthea Pang Po-kam.

The appellants completed their submissions on Tuesday, with the Department of Justice presenting its case on Wednesday. Director of Public Prosecutions Maggie Yang referred to the Hong Kong Science and Technology Parks Corporation Ordinance, stating that the corporation’s mandate includes managing and controlling the facilities and premises of the science park. She emphasized that the corporation leased the land to the applicants at a preferential rate, with specific land-use restrictions, reflecting a “special relationship” between the lessor and lessee.

In response to Yang’s assertion of a “special relationship” between the lessor and lessee, Chief Judge Jeremy Poon Shiu-chor highlighted that under the lease agreement, the lessee was required to invest HK$500 million in construction and equipment costs for printing and publishing newspapers and magazines—a significant sum. He questioned how this investment factored into Yang’s interpretation of the “special relationship.” Yang replied that while the lessee’s investment was substantial, they were simultaneously afforded protections under the agreement, including approval for a long-term lease.

Yang Highlights the “Special Relationship” in Lease Agreement Amid Judges’ Queries on Mutual Benefits

Yang argued that the lease agreement represented a “special relationship” and emphasized that while the lessees were afforded certain protections, they were equally bound by its clauses. She stated, “They invest a huge sum of money, it doesn’t mean that they can break the clause without consequences or being sued.”

Justice Anthea Pang Po-kam questioned whether the agreement was a “one-sided benefit contract,” to which Yang responded that the lessees did gain advantages from the “special relationship.” Justice Anthea Pang Po-kam countered, suggesting that the agreement also brought substantial benefits to Hong Kong by stimulating economic growth and enhancing its international image. Yang noted that such economic benefits were difficult to quantify.

Justice Anthea Pang Po-kam followed up, asking if Yang agreed that while economic benefits might be immeasurable, the project indirectly benefited Hong Kong, making the agreement not a “one-sided benefit contract.” Yang concurred with this assessment.

Department of Justice: All Companies Occupying Premises Must Obtain Licenses

Chief Judge Jeremy Poon Siu-chor raised concerns about the Department of Justice’s assertion that any associate or subsidiary company of the lessee must apply for a license to occupy the premises. He questioned how the lessee’s other companies could secure such licenses. Yang responded that any company intending to occupy premises must obtain a license approved by the Science and Technology Parks Corporation, emphasizing the defendants’ responsibility for disclosure, which they failed to fulfill by concealing the occupation of the premises.

Justice Anthea Pang Po-kam questioned whether Yang acknowledged that not all subsidiaries of the group were engaged in printing-related activities. Yang referred to testimony from Science Park Corporation CEO Albert Wong, who stated that lessees could apply for licenses for their associated companies to occupy premises, but the primary consideration was the relevance of the applicant’s business to the lessee’s operations. For example, a soy sauce company and a data company would generally be deemed unrelated, and the Science Park would not approve a license in such cases.

Chief Judge Poon questioned the requirement for “a certain degree of relevance” rather than strict compliance with specified usage. He gave an example of how printed newspapers and online news could also be considered related. Yang countered that while some breaches could be resolved through civil remedies, the concealment of “Dico Consultants Limited” existence by “Apple Printing” for years warranted criminal proceedings.

Yang reiterated that the Science Park Corporation’s duty is to manage and control the use of its premises. Without restrictions in place, it would lead to “absurd and illogical consequences,” where any company could occupy the premises indiscriminately.

Department of Justice: Jimmy Lai Used “Apple Printing” to Commit Offenses
Judge Questions Whether This Constitutes “Joint Enterprise”

Addressing Jimmy Lai’s role, Yang referred to the original trial judgment, stating, “The responsibility to apply for a license lies with the lessee and D1 (Jimmy Lai), as the principal person in charge of the lessee and the actual owner of his private company, Dico.” She further alleged that Lai used “Apple Printing” as a tool to commit the offense, describing him as the “directing mind and will” behind the actions.

Justice Carlye Chu Fun-ling raised concerns, questioning whether the Department of Justice’s claim that Lai committed offenses through “Apple Printing” implied a “joint enterprise.” She noted that if so, why had “Apple Printing” not been charged in this case. Yang explained that Lai exercised behind-the-scenes control over both “Apple Printing” and “Dico.” She cited money laundering cases as an example, where the companies involved are typically not prosecuted, emphasizing that there is no need to distinguish between personal and corporate responsibility in this instance.

With arguments from both sides concluded, the Court of Appeal stated it would issue a written judgment within six months.

Original Verdict: Lai Operated Under the “Shield of Media”

Jimmy Lai and Wong Wai-keung were both charged with a count of fraud, alleging that between January 2016 and May 2020, they, along with Royston Chow Tat-kuen and others, concealed from the Hong Kong Science and Technology Parks Corporation (formerly the Industrial Estates Corporation) that the premises at 8 Chun Ying Street, Tseung Kwan O Industrial Estate, were not being used according to the lease agreement. This lease, signed in 1999 between the Industrial Estates Corporation and Apple Daily Printing Limited, was violated with the intent to defraud the Science Park Corporation, resulting in profits for Apple Daily Printing Limited and/or Lico Consultants Limited, or causing detriment to the Science Park Corporation.

Lai faced an additional fraud charge alleging that between April 1998 and December 2015, he and others concealed from the Industrial Estates Corporation that the premises were not being used in accordance with the 1995 proposal, the lease agreement signed in 1995 between the Industrial Estates Corporation and Next Media Printing Limited (now Apple Daily Printing Limited), or the 1999 lease agreement. The intent was to defraud the Science Park Corporation.

On December 10, 2022, Lai was sentenced to 5 years and 9 months in prison, while Wong received a 21-month sentence. Lai was also fined HK$2 million and subjected to an 8-year disqualification order. Presiding Judge Stanley Chan Kwong-chi noted that Lai’s fraudulent actions spanned over 21 years, characterizing his and Wong’s exploitation of the government-granted low-cost land as acts of “self-enrichment” or “self-convenience.”

Judge Stanley Chan Kwong-chi further remarked that Lai and Next Media held significant social standing and had a large base of supporters in Hong Kong. He stated that Lai “operated under the shield of a media organization,” which deterred the Science Park from conducting surprise inspections—a factor that warranted a heavier sentence. The judge stressed that Lai’s control over a substantial media network “does not exempt him from criminal liability under the guise of press freedom,” and prosecution against him cannot be equated to an attack on press freedom.

Royston Chow Tat-kuen, originally a co-defendant in the case, testified as a prosecution witness under immunity. His case is scheduled for mention on January 20, 2025.