wsj.com Opinion | Hong Kong Snatches Assets The Editorial Board 4 minutes

Jimmy Lai leaves Hong Kong's Court of Final Appeal in Hong Kong, Feb. 1.
Photo: Vincent Yu/Associated Press

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The powers that be in Hong Kong keep assuring the world that nothing has
changed regarding its status as a financial center since the Chinese
Communist Party imposed its national security law. Tell that to Jimmy
Lai, the imprisoned media owner whose assets have now been frozen by
the Hong Kong police.

The Hong Kong Security Bureau alerted Mr. Lai on Friday that his personal
bank accounts and his 71% share in Next Digital, the company that
publishes Apple Daily, have been frozen. The South China Morning Post
says the value of the frozen assets is about $64.3 million. This is the
first time we know of that the national security law has been invoked to
deprive an owner of his equity in a publicly traded company in Hong Kong.

Hong Kong apologists will say that Mr. Lai is a special case because his
media properties support economic and political freedom. Apple Daily
continues to criticize the government even with Mr. Lai in jail. He
is currently serving a 14-month sentence for his role in unapproved
protests. He faces another trial in the coming months on three counts
of violating national security laws that are a pretext to make the
72-year-old publisher an example of what happens if you challenge
the Party.

But if the authorities can strip Mr. Lai of his assets based on a
non-judicial order, then no private contract is safe. The asset seizure
seems wholly arbitrary. Any shareholder in any Hong Kong-based company
who offends Beijing on political grounds is vulnerable. Will the Hong
Kong Stock Exchange file even a peep of protest?

The seizure won’t help Hong Kong’s eroding status as a global
financial center. The political risk is high for a CEO or board of
directors to float shares on the Hong Kong exchange, especially when
alternatives are available. The decline of the once great entrepôt of
economic freedom continues at an accelerating pace.

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