Hong Kong
Former STAND News journalists jailed for sedition in landmark Hong Kong case
On 26 September 2024, former Stand News chief editors Chung Pui-kuen and Patrick Lam were sentenced in a landmark sedition case. Chung received a 21-month prison term, while Lam’s sentence was reduced due to health issues. The ruling is seen as part of Hong Kong’s crackdown on press freedom.
On 26 September 2024, a Hong Kong district court sentenced Chung Pui-kuen, former chief editor of the pro-democracy news outlet Stand News, to 21 months in prison for sedition.
The case, which marks the first time a journalist has been jailed for sedition since Hong Kong’s return to Chinese sovereignty in 1997, is seen as part of an ongoing crackdown on media freedom in the city. Chung, aged 55, had led Stand News during the height of the 2019 pro-democracy protests.
Chung’s co-defendant, Patrick Lam, who also served as a chief editor, received a sentence reduction due to serious health issues, with the judge ruling that a return to prison could endanger his life.
Lam had already spent nearly a year in detention and will not face further jail time.
The two editors were found guilty in August 2024 of “conspiracy to publish and reproduce seditious publications,” under a colonial-era law that carries a maximum two-year prison sentence.
District Court Judge Kwok Wai-kin, who presided over the case, argued that Stand News had engaged in actions that opposed the government rather than genuine journalistic work.
“They were taking part in the so-called resistance,” Kwok stated, pointing to the publication’s support for the pro-democracy movement.
He emphasized the influence of Stand News, which had 1.6 million followers at the time of its shutdown in 2021, claiming that the seditious articles had caused significant, though unquantifiable, damage.
Kwok maintained that prison was the only viable sentence.
International outcry
The sentencing has drawn swift condemnation from international rights organizations and foreign governments.
The United States denounced the convictions as an attack on media freedom, and the European Union called on Hong Kong authorities to stop prosecuting journalists.
Amnesty International’s China director, Sarah Brooks, noted that the ruling seems aimed at fostering a “chilling effect” on the press, discouraging criticism of the authorities both in Hong Kong and abroad. Brooks added that the situation reflects the growing repression of free speech in the former British colony.
Joseph Ngan, Chair of Hong Kong Media Overseas, expressed concern over the broader implications of the case. “This case, with its landmark ruling outlawing criticism of the government, makes clear that Hong Kong has come fully into line with laws prevailing in Mainland China,” Ngan said. He recalled that Hong Kong had been promised freedom of speech after the end of British colonial rule, a promise that, he noted, “is now a distant memory.”
The press freedom watchdog Reporters Without Borders (RSF) echoed these concerns. Cédric Alviani, RSF’s Asia-Pacific Bureau Director, condemned the imprisonment of Chung and called for his immediate release.
He emphasized that both Chung and Lam were acting in the public interest by reporting on social and political issues in Hong Kong, and he urged the international community to increase pressure on China to secure their freedom, alongside other detained journalists in the city.
The rise and fall of STAND News
Stand News, a non-profit Chinese-language news site, was among Hong Kong’s most influential independent media outlets. At its peak, it had over 1.7 million followers on Facebook and nearly one million on Instagram.
The publication gained significant attention during the 2019 protests, offering extensive coverage of the pro-democracy movement.
In December 2021, the outlet was raided by 200 police officers, leading to the arrest of six journalists, including Chung and Lam.
That same day, Stand News announced its closure and terminated its staff after the government froze its assets, valued at approximately 61 million Hong Kong dollars (US$7 million). Around 70 employees lost their jobs as a result.
The prosecution in the case against Chung and Lam presented at least 17 articles published by Stand News between July 2020 and December 2021 as evidence.
These articles included interviews, profiles, and opinion pieces that the authorities deemed seditious. The trial, which ended in June 2023, saw the two journalists detained for nearly a year before being granted bail under strict conditions, including weekly reports to the police and a prohibition on giving media interviews.
Declining press freedom
In recent years, Hong Kong has seen its ranking in global press freedom indices fall dramatically.
According to Reporters Without Borders, the city dropped to 135th out of 180 countries in its 2024 World Press Freedom Index, a stark contrast to its position just two decades ago when it ranked 18th. Meanwhile, China remains near the bottom of the index, ranking 172nd.
Chinese officials in Hong Kong have rejected international criticism of the sentencing, maintaining that Stand News functioned as a political organization rather than a legitimate news outlet.
The government’s position reflects broader efforts to align Hong Kong’s governance and legal frameworks more closely with those of Mainland China, particularly in terms of controlling dissent and regulating the media.
The sentencing of Chung Pui-kuen underscores the growing constraints on press freedom in Hong Kong, further solidifying the city’s shift away from its reputation as a bastion of free speech in Asia.
China
China’s Evergrande Group halts trading in Hong Kong
China Evergrande suspends stock trading in Hong Kong as financial woes escalate. Its debt crisis and missed bond payments add to China’s property sector turmoil and raise global concerns.
HONG KONG, CHINA — Beleaguered property giant China Evergrande suspended trading of its shares on the Hong Kong stock exchange on Thursday, according to notices posted by the bourse, as the debt-ridden company grapples with severe financial difficulties.
Trading in its two other units — the firm’s property services and electric vehicle groups — also stopped at 9:00 am local time (0100 GMT), according to the notices.
The three entities had a combined market value of 16.7 billion HK dollars (US$2.1 billion) on Wednesday, Bloomberg reported.
Evergrande only just resumed trading a month ago, after the company was suspended for 17 months for not publishing its financial results.
The halt in trading comes a day after a Bloomberg report that Evergrande’s billionaire boss Xu Jiayin was being held by police under “residential surveillance”.
On Sunday, the firm said it was unable to issue new debt as its subsidiary, Hengda Real Estate Group, was being investigated.
And last Friday it said meetings planned this week on a key debt restructuring plan would not take place.
The firm said it was “necessary to reassess the terms” of the plan in order to suit the “objective situation and the demand of the creditors”.
Evergrande’s enormous debt — the firm estimated it at US$328 billion at the end of June — has contributed to the country’s deepening property sector crisis, raising fears of a global spillover.
The company’s property arm this week missed a key bond payment, and Chinese financial website Caixin reported that former executives at the firm had been detained.
That crisis has deepened a broader slowdown in the world’s second-largest economy, with youth unemployment at record highs.
The government has set an economic growth target of around five percent for this year, which would represent one of its worst performances in decades, excluding the period of the pandemic.
Massive debt
China’s property sector has long been a key pillar of growth — along with construction it accounts for about a quarter of GDP — and it experienced a dazzling boom in recent decades.
The massive debt accrued by the industry’s biggest players has, however, been seen by Beijing in recent years as an unacceptable risk for the financial system and overall economic health.
Authorities have gradually tightened developers’ access to credit since 2020, and a wave of defaults has followed — notably that of Evergrande.
The now long-running housing crisis has wreaked misery on the lives of homebuyers across the country, who have often staked life savings on properties that never materialised.
A wave of mortgage boycotts spread nationwide last summer, as cash-strapped developers struggled to raise enough to complete homes they had already sold in advance — a common practice in China.
Earlier this month, authorities in the southern city of Shenzhen said they had arrested several Evergrande employees, also calling on the public to report any cases of suspected fraud.
Another Chinese property giant, Country Garden, narrowly avoided default in recent months, after reporting a record loss and debts of more than US$150 billion.
— AFP
China
JPEX crypto fraud casts shadow over Hong Kong nascent policy
Hong Kong investors, like Jenny, fell prey to JPEX’s scam, revealing regulatory gaps. Highlights need for stricter oversight in crypto. A reminder of risks and regulatory importance.
HONG KONG, CHINA — Crypto investor Jenny first learned about digital assets at a Hong Kong store that promoted cryptocurrency exchange JPEX in March — but by September she was among more than 2,000 “inexperienced” victims police said the platform had defrauded.
“Many of my classmates and friends went all in with our investments,” Jenny — not her real name — who lost “six figures” in Hong Kong dollars, told reporters.
“We never thought it would be a scam.”
The scandal surrounding JPEX has so far seen 11 arrests of company staff and affiliated influencers this week for “conspiracy to defraud”, with victims’ losses exceeding US$175 million.
JPEX’s downfall is casting a shadow over Hong Kong’s embrace of digital assets, with experts saying it has revealed regulatory gaps just three months after the rollout of rules requiring crypto exchanges to get licensed and meet investor protection standards.
The Securities and Futures Commission last week issued a warning against the platform, saying it falsely advertised itself as “licensed” and showed suspicious features like very high returns.
In response, JPEX halted its return-generating products and imposed sky-high fees on withdrawals.
Police on Monday conducted a high-profile raid of 20 premises — including crypto businesses and private homes — seizing cash, computers and luxury handbags.
Two telecommunications service providers confirmed Thursday they complied with police to block access to JPEX’s website.
Investigators are probing whether JPEX conspired with influencers and shops to play up the platform’s legal status and the value of JPEX-issued virtual coins.
“Victims often had a ‘fear of missing out’ mentality and impulsively believed in advertisements… (But) there is no such thing as a free lunch,” said senior superintendent Kung Hing-fun, describing the scale of the case as “shocking”.
JPEX — headquartered in Dubai according to its website — has blasted the regulatory action as “unfair” and “biased”.
It has not responded to multiple AFP requests for comment.
‘Rogue players’
Crypto trading is outlawed in China but Hong Kong, which has its own financial regulations, received Beijing’s backing to pursue ambitions to become a digital asset hub.
In contrast, regulators in the United States have cracked down on the sector following the implosion of FTX last year, which lost investors billions and sparked a “crypto winter”.
Kristi Swartz, a fintech lawyer at DLA Piper, said Hong Kong faced a difficult balancing act as it needed to entice crypto businesses while installing guardrails to protect retail investors.
The licensing system enacted in June targets exchanges but excludes over-the-counter (OTC) brokerages — brick-and-mortar businesses outwardly resembling money changers — which Swartz called a “loophole”.
As for the enforcement actions against JPEX, Swartz said regulators were “a little bit heavy-handed perhaps, but I think it’s the right message to send”.
“This is an area where you’ve got a lot of rogue players.”
Some of the OTC businesses are endorsed by popular influencers and host classes where victims like Jenny are subjected to high-pressure sales tactics.
She said the store where she first learned about blockchain felt “like a big family”.
A Hong Kong crypto business owner who requested anonymity told AFP that JPEX offered hefty incentives to partner with OTC shops, including better exchange rates and subsidies for advertisement and rent.
‘Wake-up call’
Regulators on Tuesday admitted they “do not have a number on how many OTC shops are actually operating in Hong Kong”.
Clara Chiu, a former director of licensing at the SFC, told AFP such shops were less popular when she drafted Hong Kong’s fintech rules in 2019, and so were not prioritised.
“It is time for us to consider stepping up and expanding our licensing and supervision regime to OTC crypto stores,” Chiu said, citing the stores’ more “aggressive” marketing lately.
Carlton Lai, head of blockchain and cryptocurrency research at Daiwa Capital Markets, said the scandal “could be a wake-up call” for authorities.
“More regulations are probably needed on OTC shops, from the standpoint of anti-money laundering and know-your-customer” — but governing influencers will be tough, he said.
Despite the crackdown, JPEX unveiled a “stakeholders dividend plan” on its website Wednesday that let users vote — and invest — in the company’s future.
“Even in the face of such oppression and unfair treatment, our platform will continue to operate as usual,” it said.
— AFP
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