The fluctuation of demonstrations which often led to riots, had not yet led to meaningful reconciliation. So far, there are believed to be a number of high profile people behind all the series of terror in Hong Kong.

The four were nicknamed “the gang of four”. Each of them are: Hong Kong media tycoon Jimmy Lai Chee-ying, former Hong Kong chief secretary Anson Chan Fang On-sang, and Martin Lee Chu-ming and Albert Ho Chun-Yan, both lawyers.

In addition to coordinating strategies for the so-called “pro-democracy movement”, they are accused of being pawns in the hands of anti-Chinese forces in the West to interfere in Hong Kong affairs. It is also believed that Jimmy Lai is the “chief of strategy” of the riots at the financial center.

Lai, 70, founder of media company Next Digital and tabloid Apple Daily, has played an important role in triggering chaos and instability in Hong Kong.

By asking for external forces to interfere in Hong Kong affairs, Lai has sought to function as a political tool for foreign powers to oppose China and cause chaos in Hong Kong, the news agency said.

Lai is known to have made donations to political parties in the United States.

It was said that through him, foreign anti-Chinese forces funded opposition leaders and a small part of the so-called “Hong Kong independence” forces.

Lai often meets with US politicians. In July, he was received by US Vice President Mike Pence and Secretary of State Mike Pompeo, and discussed developments in Hong Kong.

Lai was behind the “Occupy Central” movement in Hong Kong in 2014 – where those who protested against Hong Kong’s election reform plans brought the city center to a halt by occupying the main road. He also visited Taiwan in 2013 to learn about street protest tactics.

Mark Pinkstone, a veteran journalist, described Apple Daily as a “famous” newspaper that had built its reputation on reports of scandals and gossip.

According to him, Lai had claimed that Hong Kong needed democracy and that the central government had taken over Hong Kong’s freedom. “But that’s not true.”

The Flow of Money for Demonstrators

We sought out Lai’s role in funding anti-extradition frontline demonstrators.

Apple Daily, labeled by Chinese state media as a ‘poisonous apple’, was published on the front page during a protest in August organized by the Civil Rights Front, ‘See You Today in Victoria Park.’ Daily page views doubled on road rally days, up to an average of 80 million, according to company data. As the number one local media in Hong Kong, there is no doubt that the media can exert undue influence on its readers because it can be used as a pro-democracy machine.

Lai claimed that although he contributed to pro-democracy parties and politicians in the Hong Kong legislature, he had not given his own money to support the protesters. “The next media support this movement,” he said, “that’s all.”

So, maybe he didn’t lie because HK$ 300,000 (although small) was donated directly to the 612 Humanitarian Relief Fund. Apple Daily also announced that HK$ 1 of each one-time fee paid HK$ 3 between June 17 and September 1 will be donated to the 612 Humanitarian Relief Fund.

He was so supportive of Dana that Joseph Zen, his close ally, was made a trustee. Because Apple Daily claims more than 1 million people have paid a one-time fee of HK$ 3, we can safely assume that HK$ 700,000 or more was also donated to the IMF through an undisclosed entity.

A more interesting question is whether someone acts as a proxy for him to sell Next Digital LTD shares when the stock price reaches a peak in June and is the proceeds from the stock sale used to fund movements?

Next Digital Ltd, which has lost money for years, is trying to change course by charging the Apple Daily online reader recently. More than 1 million people have registered by paying HK$ 3 each to maintain access to the website up to a monthly fee of HK$ 6.40 starting on 2 September. Share prices skyrocketed 132% in a two-week period in June after the company made the announcement that more than 6 million people had registered for basic access.

Share prices have risen 59% since the protests began in early June despite a 4% decline in the Hang Seng index because market sentiment was affected by protests. Meanwhile, Next Digital Ltd issued a standard announcement after the Hong Kong Stock Exchange asked for unique prices and trade volume. This request is usually issued by the Stock Exchange if the stock price moves too fast.

An overview of the financial health of Next Digital Ltd and the new paywall business model.

This group recorded a net loss of HK$ 338 million in the financial year 2018-2019. Total accumulated losses in 4 years have reached more than HK$ 1.5 billion while the group has suffered losses of HK$ 2.3 billion in the past 9 years. 60% of the company’s revenue is generated from Hong Kong while 35% from Taiwan.

Next Digital’s gear ratio more than doubled to 18.7 percent in 2017 from 9.1 percent 3 years ago. The bank has a bank loan of HK$ 485 million in 2018 which must be paid off for the next four years. In 2018, the company disposed of a HK$ 435 million property in Taiwan and withdrew a fifth of the HK$ 500 million credit line from Jimmy Lai, who had other business interests, including 14 hotels in Canada.

Investor David Webb, Next Digital’s second-largest shareholder last year, openly questioned whether people would pay for news where information was available free online. He sold Next Digital shares last year after being weakened by an employee stock incentive program. One week after the subscription fee was introduced, less than 3,000 people canceled rather than being charged a monthly rate.

It is very doubtful if Royston Chow, Next Digital’s chief financial officer earns a potential income of HK$ 500 million per year through subscriptions and so we try to trace his calculations.

Between June 17 and September 1, a one-time fee of HK$ 3 is charged. According to Apple Daily, more than 1 million of the 6 million (claimed by Jimmy Lai) who have registered for basic access have paid a one-time fee. According to Comscore, the Hong Kong website only has 5.1 million non-repeat independent users while the Taiwan website has 11.9 million non-repeat independent users.

As stated previously, HK$ 1 from each one-time fee, HK$ 3 will be donated to the 612 Humanitarian Relief Fund. Therefore, only HK$ 2 is left to be used to contribute to its income. Assuming that 1 million readers have paid HK$ 3 each, the total revenue generated is HK$ 2 million.

On September 2, a monthly fee of HK$ 6.40 began officially. This is a big stress test for Apple Daily because the company relies on customers to switch from a one-time HK$ 3 fee to a HK$ 6.40 monthly fee. If all 1 million customers convert into this monthly package, it will generate a monthly recurring income of HK$ 6.4 million and an annual income of HK$ 76.8 million.

The depressed group has a bank loan of HK$ 485 million in 2018 which must be paid back over the next four years. Even in the best case scenario where 1 million customers are willing to pay HK$ 6.40 per month, the income generated is not enough to repay the loan. We have to agree with David Webb that the total number of subscribers will be less than one million because most people prefer to browse online news for free.

Any rational investor will not be in a hurry to buy Next Digital Ltd shares given the company’s poor financial condition and unreasonable ambition to generate income solely on a subscription basis. Market sentiment was also weak in June 2019 due to anti-extradition protests and US-China trade disputes.

The Price Spike Is Not Normal In June

According to Next Digital Ltd’s annual report in 2018/19, Jimmy Lai owned 71.26% of the company’s shares. Therefore the company is very illiquid because the general instrument is less than 30%. This explains why stocks only have an average daily trading volume of less than 1 million during 2019 with an average price of HK$ 0.19 to HK$ 0.21 before June.

In the absence of a significant public float, the price of Next Digital Ltd (282: HK) shares (formerly known as Next Media) somehow jumped from June 6 this year, trading volume increased from 2,940,000 on June 5 to 117,987,304 at 17 June. The stock price has stabilized around HK$ 0.26 recently. Large buying interest in shares is questionable because the subscription model does not seem to reduce the company’s financial woes and its shares are held tightly by Jimmy Lai.

We are not sure if the announcement of the new paywall model is timed to coincide with a price increase on purpose.

It seems that the stock price reached a high of HK$ 0.38 before several large blocks of shares were released to undisclosed buyers either on the open market or outside the market. Because we cannot find transaction records outside the market, one can safely assume that the transaction is carried out on the open market because no one will buy shares at this price unless the buyer is ‘friendly’.

In addition, open market transactions usually leave no trace. If we assume 200,000,000 shares have changed hands and are sold at an average price of HK$ 0.30 to HK$ 0.32 cents, the seller will collect at least HK$ 60 million in cash. To repurchase shares in the near future to avoid changes in share ownership, the original seller only needs to wait until the stock price drops to a low average and he can then make another purchase.

It’s easy for ‘buyer friendly’ to use multiple proxy accounts to hide behind securities companies like China Galaxy and Citic Securities to buy Next Digital Ltd shares during the peak without a trace because all transactions will be fully legitimate to willing buyers – the seller’s willing.

If you analyze the historical involvement of the National Endowment for Democracy (NED) in Occupy Central and the sequence of events that have occurred since March 2019, there is a possibility that America might potentially fund civil unrest at this time.

Both Jimmy Lai from Next Digital and Martin Lee, chairman of United Democrats in Hong Kong, are very close to the foundation.

Next Digital Ltd has accumulated losses of HK$ 2.3 billion in the past 9 years but has remained active in the business. Although the paywall business model is inconclusive, the price of illiquid shares surged in June to everyone’s surprise.

Jimmy Lai once said, he spoke with reporters from Bloomberg about his meeting with US Secretary of State Mike Pompeo in July. Pompeo asked him what the US could do to help. “Pray for us,” Lai answered with her eyes torn. It is surprising why the owner of a distressed media empire will fly away to meet senior US officials only to ask for prayer.

An Action Must Be Taken

Jimmy Lai, media tycoon called “Rupert Murdoch of Asia“. Explicitly said, “I have become one of the troublemakers. I can’t make trouble and then leave,” he said. “No, we will stay. Our media will remain until the last day – until they close or close our business, or arrest me.”

Lai, 71, has historically created problems for the Chinese government since the June 1989 Tiananmen Square massacre. He has financially and convincingly supported Hong Kong’s pro-democracy political parties for decades.

An action is needed for the government and HK security forces. After it was clear that Jimmy Lai, could be said to be a logistical supporter of the demonstrators, which greatly endangered HK’s political stability, legal action must be taken immediately. Moreover, with the media under his control, incarnated as a mouthpiece for spreading hatred to the government, and in line with it, was swallowed without strong filtering by the participants of the action.

Looking at his special relationship with US officials, it can also be concluded that Jimmy Lai, a foreign agent, became an arm of Western political and economic interests.