Hong Kong Court Overturns Jimmy Lai’s Fraud Conviction, But Media Mogul Remains Imprisoned

Rare Legal Victory Amidst Ongoing Imprisonment

Jimmy Lai, the 78-year-old pro-democracy media tycoon and founder of the now-defunct Apple Daily newspaper, secured a rare legal victory on Thursday when Hong Kong’s Court of Appeal overturned his 2022 fraud conviction. The appellate court quashed the five-year-and-nine-month sentence that had been imposed for alleged lease violations at the Apple Daily headquarters, ruling that the lower court had fundamentally erred in its interpretation of contractual obligations and evidentiary standards. The decision represents one of the few instances where the billionaire activist, who has described himself as a “political prisoner,” has prevailed in Hong Kong’s increasingly restrictive legal environment.

Despite this procedural success, Lai will remain incarcerated in maximum security solitary confinement, where he has spent the past five years. Just weeks prior to this ruling, a separate court sentenced him to 20 years in prison under the Beijing-imposed national security law for convictions including conspiracy to collude with foreign forces and publishing seditious materials. The timing of the appellate decision has prompted skepticism from Lai’s family and international observers, who view it as a limited technical correction that does not alter the reality of his continued detention on politically charged charges.

Neither Lai nor his co-defendant Wong Wai-keung appeared in court for the decision, though Chief Judge Jeremy Poon had approved their absence. Wong, a 61-year-old former executive at Next Digital, had already served his 21-month sentence for the same alleged offenses before the convictions were thrown out. The ruling affects both men equally, erasing their criminal records for the fraud charges but leaving Lai in prison due to the separate national security conviction that carries the heaviest sentence yet handed down under the controversial legislation.

The Court’s Rationale: Judicial Error and Contractual Duty

The Court of Appeal’s judgment, delivered by Chief Judge Jeremy Poon alongside judges Anthea Pang and Derek Pang, centered on a technical but crucial legal distinction regarding landlord-tenant relationships and criminal fraud liability. The original 2022 conviction, handed down by District Judge Stanley Chan, had found that Lai breached the terms of Apple Daily’s lease with the Hong Kong Industrial Estates Corporation by allowing his private consultancy firm, Dico Consultants Ltd, to operate within premises designated strictly for newspaper printing and publication. Prosecutors argued this constituted fraud under Section 16A of the Theft Ordinance because Lai and Wong allegedly concealed the arrangement from the government landlord.

The appellate judges determined that this reasoning was legally unsound. They ruled that as a matter of well-established common law principles governing commercial tenancies, Apple Daily Printing held no duty to disclose breaches of user restrictions to the landlord. “We hold that Apple Daily Printing did not owe a duty to the Corporation to disclose its breach of the user restrictions or the non-alienation clauses occasioned by Dico’s occupation and use of the said Premises,” the judgment stated. The court further determined that even if such a duty had existed, criminal liability could not be attributed to Lai and Wong personally as a matter of law.

Crucially, the judges found that prosecutors failed to prove beyond reasonable doubt that the defendants had made false representations regarding the premises’ use. During the original trial, defense counsel Derek Chan had argued that Dico supported the newspaper’s publishing operations rather than serving purely personal functions, noting that the firm held a 49 percent stake in Apple Daily at the start of the relevant period and had connections to Next Animation, which produced content for the paper’s online platforms. The appellate court concluded that the trial judge’s “reasoning in concluding that the applicants were liable for the concealment as the prosecution contended is unsupportable.”

The National Security Case: A 20-Year Sentence

While the fraud acquittal eliminates one legal burden, it leaves untouched the far more consequential national security case that will keep Lai imprisoned until at least 2042, when he would be 95 years old. In February 2026, the Court of First Instance convicted Lai following a 156-day trial on two counts of conspiracy to collude with foreign forces and one count of conspiracy to publish seditious materials. The three judges in that case characterized him as the “mastermind” of a conspiracy to lobby foreign governments, including the United States and United Kingdom, to impose sanctions, blockades, or other hostile measures against China and Hong Kong.

The 20-year sentence represents the harshest penalty handed down under the national security law since Beijing imposed it in June 2020 following mass pro-democracy protests in 2019. During sentencing, the judges allowed only two years of the national security term to run concurrently with the fraud sentence, meaning 18 additional years would be served consecutively. With the fraud conviction now quashed, the calculation of Lai’s total incarceration time becomes legally complicated, though he will certainly remain imprisoned for decades barring diplomatic intervention or a successful appeal in the security case.

The national security prosecution has drawn sharp criticism from Western governments and human rights organizations, who argue the charges criminalize legitimate journalistic activities and political advocacy. The case centered on Apple Daily’s editorial stance, which included publishing articles calling for international pressure on Beijing and interviews with foreign politicians. Lai has maintained his innocence throughout, arguing that his actions constituted standard press freedom and political expression protected under Hong Kong’s Basic Law before the security law’s implementation.

Health Concerns and Family Desperation

Lai’s family and legal representatives have raised increasingly urgent alarms about his physical condition after years in solitary confinement. His son Sebastien told Reuters following Thursday’s ruling that the decision “does not change anything” for his father, who faces the prospect of dying in prison.

“He still has a sentence of 20 years in prison and has spent the last half a decade in solitary confinement in maximum security. The right thing is to release him immediately before it is too late,”

Medical issues cited by the family include retinal vein occlusion in his right eye, high blood pressure, heart palpitations, and progressive hearing loss. His daughter Claire told the BBC in December that his teeth were rotting and his fingernails “sometimes fall off,” suggesting severe nutritional deficiencies or inadequate medical care. Caoilfhionn Gallagher KC, leading Lai’s international legal team, warned that he risks dying in prison due to these compounding health problems.

Claire Lai dismissed Thursday’s appellate ruling as “nothing more than a PR move by the Hong Kong authorities,” telling the BBC that the legal victory provided no real relief.

“No one should be fooled into thinking.. [it] is anything more. The rule of law is broken there, and my father is still unjustly imprisoned and will remain so for nearly 20 years unless urgent action is taken to secure his release,”

The family’s advocacy has gained traction in Western capitals, where Lai’s case has become a focal point for concerns about Beijing’s dismantling of Hong Kong’s promised autonomy and civil liberties.

International Pressure and Diplomatic Channels

The case has evolved into a significant diplomatic issue between China and Western democracies, particularly the United Kingdom, given Lai’s British citizenship. UK Foreign Secretary Yvette Cooper issued a statement following the national security sentencing declaring that Lai was imprisoned “for exercising his right to freedom of expression” and called for his release on humanitarian grounds. The British government has faced pressure from Conservative and Liberal Democrat parliamentarians to take stronger action, including potential sanctions against Hong Kong officials responsible for the prosecutions.

In Washington, Lai’s cause has attracted bipartisan support and the personal attention of President Donald Trump, who has publicly vowed to secure the activist’s release. The White House confirmed that Trump will travel to Beijing from March 31 through April 2 for meetings with Chinese President Xi Jinping, and Lai’s children have expressed hope that the issue will feature prominently in bilateral discussions. Claire Lai attended Trump’s recent State of the Union address as a guest of House Speaker Mike Johnson, who praised Jimmy Lai for “championing democracy” and “fighting for the freedoms we too often take for granted in America.”

John Moolenaar, chair of the U.S. House of Representatives’ select committee on China, characterized the overturned fraud charge as an “illusion” designed to create a facade of judicial independence.

“The Chinese Communist Party wants the world to believe there is a fair and equal justice system in Hong Kong, but it’s all controlled by Beijing,”

Human rights groups including Amnesty International and Reporters Without Borders have similarly dismissed the fraud acquittal as insufficient to address the broader pattern of political persecution.

Broader Crackdown: The Kwok Family Case

On the same day Lai secured his legal victory, Hong Kong’s courts delivered a stark reminder of the national security law’s expanding reach into family relationships. Kwok Yin-sang, the 69-year-old father of Washington-based pro-democracy activist Anna Kwok, received an eight-month prison sentence for attempting to terminate his daughter’s education savings insurance policy and withdraw approximately HK$88,609 (US$11,400). The court found him guilty of “attempting to deal with” funds belonging to an “absconder” under provisions of the domestic national security law that criminalize handling financial resources for activists who have fled abroad.

Anna Kwok, executive director of the Hong Kong Democracy Council, is one of 34 overseas activists subject to police bounties of up to HK$1 million (US$128,000) for alleged national security violations. She described the prosecution of her father as “utterly despicable,” telling Reuters before the sentencing that weaponizing family ties would not diminish her advocacy.

“The Hong Kong government’s retaliation does not and will not discourage me from my ongoing activism,”

Kwok Yin-sang, who purchased the policy when his daughter was two years old, becomes the first person convicted under this specific provision targeting relatives of exiled activists.

The Kwok case illustrates the legal weaponization of familial bonds to exert pressure on overseas dissidents, a tactic that rights groups condemn as collective punishment. Acting Principal Magistrate Cheng Lim-chi ruled that because Anna Kwok is a fugitive, any handling of her assets, even by a parent managing funds he originally contributed, constitutes a criminal offense. This interpretation extends the security law’s extraterritorial reach while punishing family members who remain in Hong Kong, creating a powerful deterrent against continued activism abroad.

Apple Daily and the Erosion of Press Freedom

Lai’s legal troubles must be understood within the context of Apple Daily’s trajectory from popular tabloid to symbol of crushed press freedom in Hong Kong. Founded in 1995, the newspaper combined celebrity gossip with hard-hitting political reporting and overt criticism of Beijing, becoming the territory’s largest pro-democracy daily and a rare independent voice in an increasingly constrained media landscape. The paper’s closure in June 2021, following police raids and the freezing of company assets under the national security law, marked the effective end of mass-market independent journalism in Hong Kong.

The fraud case specifically concerned operations at the Hong Kong Industrial Estates Corporation premises in Tseung Kwan O, where Apple Daily maintained printing facilities. Dico Consultants, the firm at the heart of the lease dispute, performed functions related to both Lai’s personal affairs and newspaper publishing support, including connections to Next Animation. During the original trial, Judge Stanley Chan dismissed defense arguments that the firm’s presence was trivial, occupying merely 0.16 percent of the premises, insisting that tenants remained responsible for licensing compliance regardless of occupancy size.

The reversal of the fraud conviction does nothing to restore the newspaper or address the broader chilling effect on Hong Kong’s media sector. Since the security law’s implementation, numerous independent outlets have closed, journalists have been arrested, and foreign correspondents have faced visa difficulties. Lai’s continued imprisonment serves as a persistent warning to other media owners about the costs of editorial independence, even as the technical correction of his fraud conviction allows authorities to claim adherence to procedural fairness.

Government Response and Questions of Judicial Independence

Hong Kong authorities immediately moved to frame Thursday’s ruling as evidence of judicial independence rather than a substantive victory for Lai. A government spokesperson stated that the decision demonstrated courts exercise judicial power “independently” and that both the original trial and appellate process were handled “openly and transparently.” The Department of Justice announced it would “study the judgment thoroughly and consider whether to appeal,” suggesting the possibility of further prolonging the legal process even as the acquittal stands.

The government maintained that the ruling did not alter the underlying facts, insisting that Lai had “exploited public resources for personal purposes” for over two decades by allowing Dico to occupy the premises. This narrative attempts to preserve the stigma of wrongdoing while acknowledging the legal insufficiency of the fraud charges. Chinese and Hong Kong officials have consistently defended the national security case against Lai as reflecting the “spirit of the rule of law” and necessary for maintaining stability, rejecting international criticism as interference in domestic affairs.

Legal analysts note that the appellate decision, while correct on technical contract law grounds, occurs within a system where political cases receive predetermined outcomes in national security courts. The same Court of Appeal that corrected the fraud ruling has upheld other controversial national security convictions. For investors and international observers, the decision offers a limited signal regarding commercial dispute resolution while providing no reassurance about political prosecutions, as the judges took care to emphasize that their ruling applied only to the specific lease dispute and not to the separate security case.

What This Means for Lai’s Future

The immediate practical effect of the quashed fraud conviction remains unclear. Legal experts suggest the ruling could marginally reduce Lai’s total incarceration time, though the calculation depends on how prison authorities interpret the concurrent and consecutive portions of the original sentencing scheme. With the fraud sentence eliminated, the two-year concurrent period from the national security case may no longer apply as originally structured, though Lai will still face approximately 18 to 20 years of imprisonment barring early release or presidential pardon.

The ruling provides Lai’s legal team with a procedural template for challenging the national security conviction, though appeals in that case face significantly higher political stakes. His international lawyers continue to pursue advocacy at the United Nations and in foreign capitals, arguing that his detention violates international human rights standards regarding freedom of expression and humane treatment of prisoners. The upcoming Trump-Xi summit represents the most immediate opportunity for diplomatic intervention, though Chinese officials have historically resisted linking human rights cases to bilateral trade and strategic discussions.

For Hong Kong’s pro-democracy movement, Lai’s case encapsulates both the cost of resistance and the resilience of international attention. While the fraud acquittal offers a moment of legal vindication, the reality of a 78-year-old man facing two decades in prison for publishing articles and giving interviews underscores the depth of the territory’s transformation. Whether Thursday’s ruling represents a genuine, if limited, restoration of legal standards or merely a calculated gesture to deflect international criticism will become clearer as authorities decide whether to appeal and how they handle Lai’s continued detention.

Key Points

• Hong Kong’s Court of Appeal overturned Jimmy Lai’s 2022 fraud conviction, ruling the trial judge erred in interpreting contractual duties and that prosecutors failed to prove false representations
• Lai remains imprisoned under a separate 20-year sentence for national security offenses including collusion with foreign forces and publishing seditious materials
• Co-defendant Wong Wai-keung also had his conviction quashed, though he had already served his 21-month sentence
• The Department of Justice is reviewing the ruling and may file a further appeal to the Court of Final Appeal
• Lai’s family and international lawyers dismissed the ruling as a public relations move that does not address his deteriorating health or prolonged solitary confinement
• US President Donald Trump is scheduled to meet Chinese leader Xi Jinping in late March, with Lai’s children hoping for diplomatic intervention
• UK Foreign Secretary Yvette Cooper has called for Lai’s release on humanitarian grounds, citing his British citizenship and declining health
• On the same day, a Hong Kong court sentenced the father of activist Anna Kwok to eight months for handling his daughter’s insurance policy, the first conviction targeting relatives of overseas dissidents