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Hong Kong’s special inspector raids Next Digital’s office to seize financial records in its probe into publisher of defunct Apple Daily

  • The Eastern Magistrate Court granted a search warrant for the inspector Clement Chan to enter Next Digital’s offices in Tseung Kwan O to seize the financial documents
  • Chan is due to report the results of his investigations within six months

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Workers removing boxes of financial records from the Next Digital Building in Tseung Kwan O on September 28, 2021 after the Hong Kong government-appointed special inspector obtained a search warrant to seize documents from the publisher of the now-defunct Apple Daily newspaper. Photo: Sam Tsang.
Enoch Yiu

A special inspector appointed by Hong Kong’s government today raided Next Digital Limited’s office to seize the company’s financial records as he ratcheted up his investigation of possible fraud at the parent of the now-defunct Apple Daily newspaper.

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The search and seizure by the inspector, Clement Chan Kam-wing, was authorised by a warrant issued yesterday by Hong Kong’s Eastern Magistrate Court. The warrant was needed as every member of Next Digital’s senior management team and board of directors has resigned over the past two months, leaving nobody in charge to hand over the books.

The move, expected to last over several days, marks the most dramatic action since Chan was appointed on July 28 by Hong Kong’s Financial Secretary Paul Chan Mo-po to look into allegations of illegal and fraudulent activities at Next Digital. Chan, the managing director for assurance for the accounting firm BDO, is due to deliver the report of his probes in six months.

“I have been having difficulties getting them to provide information, since their Board members collectively resigned,” Chan said in response to a query by South China Morning Post. “Under section 877 of the Companies Ordinance, I have applied for a search warrant yesterday to enter [Next Digital’s] premises to seize the information that I need for my investigation.”

Clement Chan Kam-wing, president of Hong Kong Institute of Certified Public Accountants, on 19 December 2013. Photo: SCMP
Clement Chan Kam-wing, president of Hong Kong Institute of Certified Public Accountants, on 19 December 2013. Photo: SCMP
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Trading in the shares of Next Digital, founded by the media magnate Jimmy Lai Chee-ying, was suspended on the Hong Kong stock exchange since June 16, as the company’s flagship newspaper Apple Daily published its last edition on June 24 following Lai’s arrest in August 2020 under the national security law.

Local authorities have frozen HK$18 million (US$2.3 million) of Next Digital’s assets. The company still operates the digital version of the Taiwan edition of Apple Daily, and it has been reported that several parties have expressed an interest in acquiring the business.

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