San Francisco Frontiers - Hong Kong mogul Jimmy Lai wins appeal in fraud case

The ruling was a surprise win for Lai, the 78-year-old founder of the now-defunct Apple Daily newspaper, who was sentenced to 20 years behind bars this month on collusion charges under a Beijing-imposed national security law.

The fraud case grew out of a contractual dispute and was unrelated to the charges he faced under the security law.

Lai did not appear in court and remains behind bars.

"(We) allow the appeals, quash the convictions and set aside the sentences," High Court Chief Judge Jeremy Poon said, adding that he granted Lai's application not to show up in court.

The Department of Justice will study the ruling "thoroughly in order to consider lodging an appeal", a government spokesperson said.

In 2022, Lai received a jail sentence of five years and nine months over what the trial judge called a "planned, organised and years-long" scheme.

It remains unclear how Thursday's outcome affects Lai's overall prison stint.

The tycoon received 20 years in his national security case, with two of those years designed to overlap with his fraud case sentence -- which has now been quashed.

Lai's two-decade penalty was by far the harshest under Hong Kong's national security law, which Beijing imposed in 2020 after huge pro-democracy protests in the former British colony.

Critics, including the United States, Britain, the European Union and advocacy groups, said that the lengthy jail term would be "effectively a death sentence" for Lai.

The mogul has been behind bars since 2020 and spent much of that time in solitary confinement, which authorities said was arranged at his own request to avoid harassment.

His supporters, children, lawyers and rights groups have all raised concerns about his deteriorating health in prison, although authorities maintain he receives "adequate" care.

- 'Unsupportable' -

In the fraud case, prosecutors said at trial that a consultancy firm Lai operated for his personal use had taken up office space that Apple Daily had rented for the purposes of publication and printing.

This was in breach of the terms of the lease Apple Daily signed with a government company and amounted to fraud, prosecutors said.

In addition to his jail term, Lai was fined HK$2 million ($256,000) and banned from managing companies for eight years.

But the appeal judges ruled on Thursday that "the prosecution has failed to prove that the applicants had made the false representation as alleged", adding that the trial judge's reasoning was "unsupportable".

The Hong Kong government spokesperson on Thursday insisted that "the objective fact remains that (Lai) has exploited public resources for private use" even if that fell short of fraud.

Former Apple Daily executive Wong Wai-keung was also convicted in the same case and has already finished serving a 21-month prison term.

Wong's conviction and sentence were also quashed on Thursday.

S.Hall--SFF