Taiwan on Saturday warned that risks for businesses have increased in Hong Kong after authorities in the international finance hub used asset freezing powers under Beijing's new national security law for the first time.

The warning came in response to Hong Kong freezing billionaire pro-democracy tycoon Jimmy Lai's assets, including shares in his media publications, for allegedly breaching the security law.

Taiwan's Mainland Affairs Council said the move "highlights the National Security Law's threats".

"It's equivalent to announcing to the international community that Hong Kong's business risks are increasing," the council said in a statement.

Self-ruled Taiwan has voiced support for Hong Kong's democracy movement and has quietly given sanctuary to residents who successfully flee there.

"We also once again call on relevant parties to stop suppressing Hong Kong democrats, otherwise they will drift away from popular sentiment," it added.

The action by Hong Kong marks the first time that authorities have used the security law to freeze the shares of a listed company's large shareholder -- a step that could cause further jitters for investor sentiment in the business hub.

The security law, which was imposed by Beijing last year, grants authorities sweeping powers to freeze the assets of anyone, or company, deemed to be a national security threat.

Friday's order covered Lai's shares in his Next Digital media group and the property in the local bank accounts of three companies owned by him.

The 73-year-old media tycoon has long been a thorn in Beijing's side for his caustic newspaper and unapologetic support for democracy.

His Apple Daily newspaper has staunchly backed Hong Kong's pro-democracy cause, including the huge and often violent protests that swept the international financial hub in 2019.

Apple Daily said the asset freeze did not extend to its own bank accounts and the paper would continue to publish.

Lai is currently in jail for attending some of the huge democracy protests that rocked Hong Kong.

He is also charged under the security law for allegedly calling for sanctions against China and could be jailed for up to life if convicted.

Chinese authorities have rolled out a relentless and successful campaign to silence dissent in Hong Kong since 2019's protests.

Beijing argues the security law was needed to return stability and does not impact freedoms.

But its broad wording and subsequent application have criminalised much dissent and radically transformed a once politically pluralistic city.

More than 100 people have been arrested under the law.

On Wednesday, more than 40 percent of a top US business group's members in Hong Kong said they plan to leave the city, with 60 percent of those citing concerns over the national security law.

However, leaving is an expensive and disruptive endeavour and so far there has been little sign of a business exodus.

Pro-democracy Hong Kong newspaper halts shares after asset freeze
Hong Kong (AFP) May 17, 2021 - Hong Kong's largest pro-democracy media group announced it was halting share trading Monday, two days after authorities froze the assets of its jailed owner Jimmy Lai under a new national security law.

Next Digital Limited -- which publishes the Apple Daily newspaper -- said it would halt trading "pending the release of an announcement" about Lai's frozen assets, in a statement to the city's stock exchange.

On Friday the Hong Kong Security Bureau announced it was freezing Lai's shares in Next Digital as well as the contents of three of his bank accounts, using the security law which Beijing imposed on the city last year.

It marks the first time authorities have wielded the law to freeze the shares of a listed company's major shareholder -- a step that could cause further jitters for investor sentiment in the business hub.

A rags-to-riches billionaire, media tycoon Lai, 73, has long been a thorn in Beijing's side thanks to his caustic tabloids and unapologetic support for democracy.

Apple Daily, the city's most popular tabloid, has staunchly backed Hong Kong's pro-democracy cause, including the huge and often violent protests that swept the international financial hub in 2019.

Chinese authorities have made no secret of their desire to see Apple Daily shut down and Lai silenced.

Hong Kong police chief Chris Tang has also accused Apple Daily of publishing "fake news".

Apple Daily responded to the asset freeze with defiance over the weekend, vowing to continue publishing and saying that the company's own bank accounts were not affected.

However it said the company would probably only survive another nine or 10 months without Lai's cash which he has used to prop the group up.

The asset freeze comes as Chinese authorities roll out a relentless and successful campaign to silence dissent in Hong Kong.

Lai faces a raft of prosecutions.

Last month he was convicted and jailed for taking part in the 2019 protests.

He is due in court later Monday on another prosecution linked to those protests alongside fellow activists.

He was also detained under the security law last year and charged with "colluding with foreign forces" for allegedly advocating foreign sanctions against Hong Kong and China's leaders.

More than 100 people -- including some of the city's most prominent democracy activists -- have been arrested under the law.

Most of those charged are refused bail and those who are convicted face up to life in jail.

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