Hong Kong police have barred jailed Apple Daily founder Jimmy Lai from exercising his voting rights in the Next Digital media company he holds as the major shareholder.

Next Digital — Apple Daily’s publisher — was informed of the decision in a letter issued by the police’s National Security Department, according to a company announcement on the Hong Kong Stock Exchange on Tuesday.

It followed another announcement last week that clarified the company’s financial situation after Lai’s assets  — including his 71% stake in Next Digital — were frozen by national security police.

The prohibition could only be lifted “under the authority of a license granted by the Secretary for Security,” the announcement said.

“As Mr. Lai is a shareholder of the Company, not a member of the board of directors of the Company, the prohibition of exercise of the voting rights in relation to any shares in the Company held by him is not expected to have any impact on the operational and financial performance of the Company,” it said.

The takeover of Lai’s voting rights was yet another major blow to the free market in Hong Kong, as his rights were protected by the city’s Companies Ordinance, which forbids the authorities from arbitrarily violating shareholders’ rights, one senior accountant said.

Lai currently owns 1.878 billion shares of Next Digital, which is equivalent to 71.26% of the total issued shares. The holders of the remaining shares can still continue to exercise their voting rights at the company’s general meeting.

The remaining 28.74% of shareholders would become shareholders with 100% voting rights of Next Digital, which could control the board of directors and determine the company’s future, the senior accountant said.

For example, they could propose the removal of individual or even all board members, he said, and that their decisions could alter Next Digital’s policies or current development direction.

Lai’s assets in the local bank accounts of three other companies he owns were also frozen, alongside his shares in Next Digital in the May 14 order by the city’s security chief.

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