Jimmy Lai ‘illegally ran consultancy’ at Apple Daily offices

Move allowed tycoon’s firm, Dico, to evade land premium of up to HK$110m, prosecution argues

Jailed media tycoon Jimmy Lai Chee-ying illegally ran a consultancy firm at Apple Daily’s offices in the city for more than two decades to facilitate his family’s businesses and manage his personal assets, prosecutors have argued on the first day of his fraud trial.

A District Court judge designated to adjudicate national security proceedings yesterday began hearing the allegations against Lai and a former Next Digital executive, after the pair pleaded not guilty last week.

While fraud is not a crime under the Beijing-imposed national security law, prosecutors have asked that their complaint be heard by a judge hand-picked by Chief Executive Carrie Lam Cheng Yuet-ngor for national security cases, who they said could better foresee any potential challenges to the prosecution’s case.

Lai, 74, and former chief administrative officer Wong Waikeung, 60, stand accused of illegally subleasing office space at Apple Daily Printing Limited to Dico Consultants Limited, a firm controlled by the media mogul, shortly after the newspaper relocated its headquarters in 1998.

The move had enabled the now-defunct publication to earn at least HK$1.09 million in rent from Dico and allow the latter to evade land premium of up to HK$110 million, Director of Public Prosecutions Maggie Yang Meikei said in her 30-page opening statement.

Yang referred to three land lease documents signed between 1995 and 1999, through which Lai borrowed a government lot in anticipation of moving his media group’s offices from Cheung Sha

Wan to Tseung Kwan O Industrial Estate.

Terms for the lease included a ban on using office space other than for the purpose authorised by the landlord – Hong Kong Science and Technology Parks Corporation – in Apple Daily’s case, “publishing and printing of newspapers and magazines and ancillary services”.

The court heard Dico provided secretarial services to 22 local companies from June 2016 until May 2020, when the firm moved to Kwun Tong. Lai was the director of 11 of those companies, with his son Ian Lai Yiu-yan involved in the management of 10 others.

From 2014 onwards, Dico took out insurance for Lai, his mansion on Kadoorie Avenue, the domestic helpers working there, and his personal property.

It was also responsible for covering the expenses of maintaining Lai’s residence and his three yachts.

The firm’s general manager was Lai’s right-hand man, Mark Simon, who would directly report to Lai and relay the tycoon’s instructions to other Next Digital executives.

The corporation became aware of Dico’s operation and its possible misuse of office space in March 2020 following media inquiries. Lai, via Simon, later instructed Next Digital’s senior staff members to plan for Dico’s exit.

In a written response to the corporation’s queries, Wong claimed that Dico had merely “used the lot as an address” and did not occupy any part of the newspaper’s premises.

Yang said that statement was false because Dico had only moved out after the breach came to light.

The five-week trial continues before Judge Stanley Chan Kwong-chi today.