Apple Daily financial records targeted in raid

A special inspector appointed by Financial Secretary Paul Chan Mo-po raided the premises of Next Digital yesterday in search of financial records for its probe into the publisher of defunct Apple Daily.

Clement Chan Kam-wing, former president of the Hong Kong Institute of Certified Public Accountants, was appointed in July to investigate the affairs of Next Digital under the Companies Ordinance.

Next Digital's board of directors - including Ip Yut-kin, Louis Gordon Crovitz and Mark Lambert Clifford - resigned on September 5 and Chan has since experienced difficulties in obtaining information necessary for the investigation in a timely manner, according to a statement by the inspector's office.

"In view of the circumstance, the inspector invoked the powers given by the Companies Ordinance to apply for - and which had been granted - a search warrant to enter Next Digital's premises [yesterday] to seize information that may help the investigation process," the office said.

"The inspector is expecting to continue the investigation on Next Digital as he has been asked."

With police assistance, dozens of people were seen entering the premises at Tseung Kwan O Industrial Estate.

Chan said after attending a police watchdog meeting that he was looking for accounting documents, management meeting minutes and transaction documents, among others.

Since all Next Digital executives have resigned and the remaining junior staff do not know where to find the documents, the search in the two Next Digital buildings could not be completed in one day, he said.

Asked if he would search the homes of the management members, Chan said it depends on what they could learn from the seized documents. Chan also said the search did not include news materials.

Paul Chan, when he appointed the inspector, said "it appears Next Digital has been run in a manner unfairly prejudicial to the interests of its shareholders and creditors."

He suspected Next Digital's officers tied to alleged fraud offenses and misconduct have used the company to conduct unlawful activities, adding they could have breached their fiduciary duties.

He questioned whether when he appointed the inspector officers had taken reasonable and adequate measures to protect the interests of shareholders and creditors. The inspector has to submit a report in six months.

Apple Daily ceased its online operation on June 23 and printed its last edition on June 24 after authorities froze HK$18 million of Apple Daily Ltd, Apple Daily Printing Ltd and the AD Internet assets as part of a national security investigation.

At least 14 people related to the media outlet have been arrested or charged, including imprisoned 73-year-old founder Jimmy Lai Chee-ying, who was charged with colluding with foreign forces as well as conspiracy to defraud.

sophie.hui@singtaonewscorp.com