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A vendor adjusts copies of Apple Daily newspapers at a newsstand in downtown Hong Kong, June 18, 2021.

Vincent Yu/The Associated Press

The pro-democracy Hong Kong newspaper Apple Daily looked set to close for good by Saturday after police raids and the arrest of executives – a move that critics say undermines the city’s status as a free and open society as Beijing tightens its grip.

Mark Simon, an adviser to the jailed owner and staunch Beijing critic Jimmy Lai, told Reuters on Monday the newspaper would be forced to shut “in a matter of days” after authorities froze access to the firm’s core operating capital on national security grounds that were needed for staff wages and other expenses.

In an internal memo to some staff seen by Reuters, the Apple Daily said the board of its parent company, Next Media, would decide by week’s end whether to keep going.

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“If the board decides not to continue to operate on Friday, online will stop uploading at 23:59 p.m. on the day, newspaper will cease operation after publishing the June 26 edition.”

Apple Daily and Next Digital management could not be reached for comment.

The jewel in Mr. Lai’s Next Digital media business, Apple Daily is a popular tabloid founded 26 years ago that mixes pro-democracy discourse with celebrity gossip and critical reports on China’s Communist leaders.

Hundreds of police raided the newspaper last week in a national security probe in which senior Apple Daily executives were arrested for alleged “collusion with a foreign country” and 18 million Hong Kong dollars (about $2.86-million) in assets were frozen.

Late on Monday, several Hong Kong media outlets reported that Apple Daily and its online edition would cease operations by Wednesday as most of its employees had resigned.

The looming demise of Apple follows the imposition of a national security law on the former British colony last year in response to mass pro-democracy protests in 2019.

Western democracies including the United States say Beijing has used the law to stifle freedoms and impose greater control over the semi-autonomous trade entrepôt and financial centre.

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Police have claimed dozens of Apple Daily articles violated the new security law – the first instance of authorities targeting media articles under the contentious legislation.

But another senior company source with direct knowledge of the matter said the freezing of the firm’s core assets – before any trial or due legal process proved any criminality – had made it impossible to pay wages or even electricity bills.

“This is an extraordinary thing for a place that prides itself on [being] a global financial centre, that you haven’t even filed charges against people and yet you’ve decided you’re going to try to … choke this company to death,” the source said.

“It’s surreal. You know the intensity with which the Chinese Communist Party works. It’s a testament to the depths to which they will sink to destroy private companies, without even the fiction of a conviction.”

Editor-in-chief Ryan Law and chief executive officer Cheung Kim-hung were charged with collusion with a foreign country and denied bail on Saturday. Three other senior executives were also arrested on Thursday and released pending further investigation.

The company said in the memo the board had sent a letter to Hong Kong’s Security Bureau to ask that some assets be unfrozen in order for it to avoid violating labour laws by failing to pay staff. The company asked the Security Bureau to reply by Friday.

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The Security Bureau said Monday it would not comment given ongoing legal proceedings and any application related to the frozen property would be handled according to the law.

“Endangering national security is a very serious crime,” it said in a statement to Reuters, without giving specifics.

China’s Liaison Office in the city did not respond to requests for comment.

The arrests and scale of the Apple Daily raid have been criticized by Western countries, global rights groups, press associations and the chief UN spokesperson for human rights.

Security secretary John Lee said last Thursday the police operation against Apple Daily was aimed at those who use reporting as a tool to endanger national security and did not target the media industry as a whole.

China’s Foreign Commissioner’s Office said last week that press freedom cannot be used as a “shield” for those who commit crimes.

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Next Digital has come under increasing pressure since Mr. Lai was arrested last year under the legislation. Mr. Lai, whose assets have also been frozen under the security law, is in jail for taking part in unauthorized assemblies.

“We hope that even though this platform will no longer be around that Hong Kong journalists will continue to hold ground and pursue the truth,” said Ingrid Tse, the host of an Apple Daily nightly news broadcast who signed off for good on Monday.

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