Shares in Jimmy Lai-controlled Hong Kong-based media grew 330 percent as they resumed trading after authorities thwarted the assets of the pro-democracy mogul imprisoned under a controversial national security law.
Next Digital, listed in Hong Kong, owns the tabloid newspaper Apple Daily, which has angered the city government for its role in covering pro-democracy demonstrations in 2019. Lai is in prison for his participation in the protests. and makes other charges, including a conspiracy to collide with foreign forces. under Hong Kong security law.
Shares in Next Digital later cut gains in Thursday’s trade to be 96 percent higher.
Dickie Wong, research director of Hong Kong brokerage Kingston Securities, said the jump was probably due to Apple Daily supporters who bought the stock and were not tied to the company’s health.
“Obviously on the purchasing side, the momentum is very strong…. Some of the people on the ‘yellow’ side can support this society,” Wong said, referring to Hong Kong’s pro-democracy movement. its members are known to have worn yellow ribbons.
Next Digital’s shares have been extremely volatile in all of Lai’s legal troubles. In August, the stock nearly tripled after the billionaire was arrested for alleged violations of national security law and the Apple Daily office was raided. Supporters rallied in the action in a show of solidarity.
As a result, the police arrested 15 people in September on charges of conspiracy to defraud and money laundering, accusing some of the detainees of manipulating the price of Next’s stock.
Apple Daily has encountered financial difficulties due to the pandemic and concerns that authorities will eventually force the newspaper to close. He also planted the print edition of his Taiwanese edition.
Earlier this month, the The Hong Kong government has frozen Lai’s actions in Next Digital, as well as the bank accounts of three companies he owns. This led to the cessation of trading of the group’s shares.
The development marked the first time that the national security law, imposed by Beijing last year, has been enacted against a majority investor in a listed company.
Lai owns 71 percent of Next Digital, a stake of about HK 350 million ($ 45 million). He also made a significant amount of loans to the company.
Trading in shares resumed after Next Digital said late Wednesday that it was in discussions with its auditors and had sufficient working capital for at least 16 months from June. The company added that it meets the 25 percent public float requirement under the stock exchange listing rules.
Former pro-Beijing voices in Hong Kong continue to put pressure on the company.
CY Leung, a former city chief, said Wednesday in a Facebook post that Next Digital’s management was “negligent,” “irresponsible” and “deceptive” to say the group’s operations and financial health are not not affected by active Lai cold.
Leung, who suggested he was a minor shareholder in Next Digital, added that he had complained to financial regulators about the group’s comments.