Shares in Hong Kong-owned Hong Kong Media Company rose 330 percent as they resumed trading after authorities froze the assets of a jailed pro-democracy tycoon under controversial national security law.
Hong Kong-based Next Digital owns the tabloid Apple Daily, which has angered the city government over its role in covering the 2019 pro-democracy protests. Lai is in prison for participating in protests; he faces other charges, including conspiracy to cooperate with outside forces. under Hong Kong Security Act.
Shares of Next Digital further reduced their gains in trading on Thursday by 96%.
Dicky Wong, research director at Hong Kong-based brokerage firm Hong Kong, says the jump is most likely due to Apple Daily supporters buying shares that have nothing to do with business health.
“Obviously, the momentum from the purchase is very strong. “Some people on the ‘yellow side’ can support this company,” said Wong, referring to the pro-democracy movement in Hong Kong, whose members are known for their yellow ribbons.
Shares of Next Digital have been volatile throughout Lai’s legal woes. Shares nearly tripled in August after the billionaire was arrested on charges of violating national security law և’s attack on Apple Daily’s office. Supporters rallied in shares in solidarity.
As a result, the police arrested 15 people in September Accused of fraud and money laundering, claiming that some of those arrested had manipulated the price of Next shares.
Apple Daily has faced financial difficulties due to the epidemic, due to fears that the authorities will eventually force the newspaper to close. It also stopped publishing in Taiwan.
Earlier this month, The Hong Kong government froze Lai shares Next Digital, as well as the bank accounts of the three companies it owns. This prompted the termination of the group’s shares.
This development was first seen in the application of the Beijing National Security Act last year to a majority investor in a listed company.
Lai owns 71% of Next Digital, which has a stake of about $ 350 million ($ 45 million). He also provided a number of significant loans to the company.
Stock trading resumed after Next Digital announced late Wednesday that it was in discussions with its auditors that it had sufficient working capital for at least 16 months from June. The company added that it met the requirement of 25% of public flames in accordance with the rules of listing the stock exchange.
Pro-Beijing senior voices in Hong Kong continue to put pressure on the company.
Former City Mayor CY Leung said in a Facebook post on Wednesday that Next Digital’s management was “careless,” “irresponsible,” and “misleading,” saying the group’s operations and financial health remained invulnerable to Lai’s freeze. : assets:
Lyung, who assumed he was a minor shareholder in Next Digital, added that he had complained to financial regulators about the group’s comments.