By James Pomfret, Greg Torode and Jessie Pang
HONG KONG (Reuters) -A long-awaited national security trial opens in Hong Kong on Monday for leading China critic and media tycoon Jimmy Lai, who faces possible life imprisonment on charges he colluded with foreign forces, including the United States.
Foreign envoys, business people and legal scholars will be watching the trial closely, saying it looms as a fresh diplomatic flashpoint and a key test for the city's judicial independence and freedoms under the sweeping national security law imposed by China in 2020.
Jimmy Lai, 76, the founder of now-shuttered pro-democracy newspaper Apple (NASDAQ:AAPL) Daily and one of the most prominent Hong Kong critics of China's Communist Party leadership, has faced a salvo of litigation since a wave of pro-democracy demonstrations in 2019.
Lai, whom China's foreign ministry this week called a "notorious anti-China element", faces several charges under the law, including collusion with foreign forces - a count that involves calling for sanctions against Hong Kong and Chinese officials.
He also faces a charge under older sedition laws, with senior journalists and executives at Lai's Apple Daily newspaper also arrested. Lai has pleaded not guilty to all charges, but those other staffers have pleaded guilty.
Lai is already serving a 5-year, 9-month jail term for a fraud conviction over a lease dispute for his newspaper.
Hong Kong and Chinese authorities say the city's rule of law is robust and all are treated equally before it. Both Hong Kong and Chinese officials say the security legislation was needed to restore stability to the former British colony.
But some close to Lai take a dimmer view, noting the use of the law's powers to deny Lai bail, block a jury trial, and allow the city's pro-Beijing leader to appoint three high court judges who will hear the case.
"Any talk of justice would be a farce," Sebastien Lai, one of his sons, told Reuters from London, where he recently met the British Foreign Secretary David Cameron. "Everyone knows it's going to be a show trial."
People familiar with the case say it could last more than 80 days.
The U.S. government has repeatedly called for Lai's release, saying his case is politically motivated and part of an ongoing security clampdown that has all but dissolved the city's opposition democrats, with many jailed or fleeing into exile.
The trial comes as the city prepares to enact a new round of national security laws next year known as Article 23 that will further tighten China's grip, and include counter-espionage legislation that could strengthen official control over foreign institutions.
'LIQUIDATION' OF LISTED COMPANY
Lai's plight has also highlighted some of the contradictions faced by Hong Kong as it seeks to rejuvenate its reputation as a global financial centre with national security now a policy prerogative under China's leader, Xi Jinping.
Lai's listed company Next Digital had its assets frozen after a mass police raid on its headquarters, and bankers were threatened, essentially crippling operations and forcing its shutdown.
Hong Kong authorities on Friday moved to extend an asset freezing order beyond the usual two years to remain valid until the conclusion of related legal proceedings.
"The prosecution of Jimmy Lai and the forced closure of Apple Daily are a sad sign of what has happened to Hong Kong," Gordon Crovitz, a former director of Next Digital and a former publisher of the Wall Street Journal, told Reuters. "Both in terms of the decline of the free press, and the dangers of operating a publicly traded company where the national security law can be invoked to force the liquidation of a listed company without any involvement of a court."
SANCTIONS FOCUS
Lai and his key executives involved in this trial are accused of calling for foreign sanctions against Hong Kong and China between July 2020 and June 2021.
Prosecutor Anthony Chau had accused Lai of requesting foreign sanctions before the introduction of the security law, including meeting then-U.S. Secretary of State Mike Pompeo in July 2019 to discuss the extradition amendment bill and attending a speech by then-U.S. Vice President Mike Pence in October 2019.
Chau also alleged the Apple Daily acted as a platform for a foreign country or organisation to impose sanctions against the Hong Kong and Chinese governments, including public letters addressed to then-U.S. President Donald Trump, appealing for international pressure against Beijing.
Chau listed more than 160 articles published by Apple Daily and accused it of carrying seditious statements against the Hong Kong and Chinese governments, and appealing to people to take part in protests.
Three sources with direct knowledge of the matter, but who declined to be named given the sensitivity of the subject, said the prosecution would most likely focus on convicting Lai on sanctions-related grounds, given numerous public comments and writings he made on the topic.
Six witnesses for the prosecution are expected to be called, including senior former Apple Daily staffers, and activists.
Two of these witnesses, Andy Li and Chan Tsz-wah, are accused of requesting foreign sanctions in concert with Lai, his assistant Mark Simon, exiled activist Finn Lau and others up until early 2021.
A person familiar with Lai's situation said the tycoon has lost weight in jail but was in a "steadfast" mood and ready to face his accusers.
The High Court in May rejected an application to terminate the trial against Lai. Lai's defence lawyer, Robert Pang, argued that there is an apparent bias against Lai by the court because of a lack of transparency in the appointment of national security judges.
A London lawyer, Timothy Owen, was barred from hearing Lai's trial this year after the city legislature passed a bill giving the city's leader the power to bar lawyers without the right to practice in Hong Kong from national security cases, after a Beijing ruling.