Hong Kong’s Top Court Sends Tycoon Jimmy Lai Back to Jail

(Bloomberg) -- Hong Kong’s highest court sent tycoon Jimmy Lai back to jail as he fights national security charges, in a decision that also signaled plans to interpret provisions the Beijing-drafted law used to charge him.

The Court of Final Appeal ruled Thursday that Lai must be returned to custody while judges consider the government’s appeal against his bail due to the seriousness of the charges. The court led by outgoing Chief Justice Geoffrey Ma, however, said the court planned to weigh in on a controversial provision of the national security law imposed by Beijing on the former British colony.

A Feb. 1 hearing was scheduled to discuss the case, which could affirm the judiciary’s right to interpret the legislation drafted by the National People’s Congress and approved by President Xi Jinping. A lower court had released the Next Digital Ltd. founder from jail last week on HK$10 million ($1.3 million) bail and placed him under house arrest pending a trial next year.

The People’s Daily newspaper -- the official mouthpiece of Xi’s Communist Party -- blasted the bail decision as “unbelievable” in a commentary Saturday, warning that the case could be transferred to mainland courts under the security law. While the Court of Final Appeal put off an immediate showdown with Beijing, the decision to return Lai to jail could fuel concern about pre-trial imprisonment under the legislation, which criminalizes secession, subversion, terrorism and collusion with foreign powers.

“It will be really interesting to see how the CFA looks at the provision of the NSL, and in particular the protections of human rights that was set out in the NSL and in other Hong Kong laws,” said Antony Dapiran, a Hong Kong-based lawyer and author of “City on Fire: The Fight for Hong Kong.” “How will they reconcile the bail provision of the NSL with other essential human rights? How will they construe them together? And what will that say about how they interpret the NSL as a whole?”

Dapiran also speculated that that the National People’s Congress could preempt the court with its own interpretation of the security law, overruling the local judicial process.

The security legislation has led the U.S., U.K. and others to accuse Beijing of breaking its agreements to maintain Hong Kong’s liberal institutions including its “independent judicial power” until 2047. The U.S. has placed financial sanctions on several top Chinese officials over their roles in enacting the law without public debate, including Chief Executive Carrie Lam.

At least 29 people have been arrested under the security law since its enactment on June 30 and Lai was among the first to be formally charged. He has been accused of calling on a foreign entity to impose sanctions or engage in hostile activities against Hong Kong or China between July 1 and Dec. 1 this year and faces a separate charge of fraud.

Lai denies the charges and said he’s being targeted for fighting for freedom of speech in the city. He also faces several cases related to his participation in last year’s protest movement. On Tuesday, Lai resigned as chairman of Next Digital, the media group he founded more than three decades ago.

The security law contains several provisions that lawyers say undercut Hong Kong’s English Common Law traditions, giving the government power to select judges and transfer cases to the mainland for trial. The article at issue in Lai’s case says that defendants shouldn’t receive bail “unless the judge has sufficient grounds for believing that the criminal suspect or defendant will not continue to commit acts endangering national security.”

In his Dec. 23 decision to release Lai, Justice Alex Lee had argued it was possible to grant bail for those charged under the new law. Lai was required to surrender any travel documents, remain at home and refrain from meeting with foreign politicians or making any public statements.

Lee said the bail decision to grant Lai bail would’ve been “relatively straightforward,” if not for the national security charge against him.

During proceedings Thursday, prosecutor Anthony Chau argued that the threshold for bail should be higher for defendants in national security cases. Those who require special conditions to prevent them committing future offenses shouldn’t be eligible for release, said Chau, the senior assistant director of public prosecutions.

Lai’s lawyer, Peter Duncan, disputed the claim that Lai should face a higher standard for bail than a defendant in a normal criminal case. He called the government’s argument that bail couldn’t be granted if special conditions were required “a radical departure from the traditional approach.”

The decision appears set to be among the last rulings by Ma, who is set to retire as chief justice on Jan. 11. Andrew Cheung, another member of the Court of Final Appeal that heard Lai’s case Thursday, has been appointed to replace him.

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