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As the founder of the Apple Daily newspaper left the police station in the passenger seat of a black Mercedes early Wednesday morning, he gave two thumbs up to crowds of people waiting for his release, many of whom were waving copies of his newspaper and chanting, “Support Apple until the end!”
Mr. Lai was among 10 people arrested Monday. All of them have been released on bail, including another well-known pro-democracy activist, 23-year-old Agnes Chow, local media reported.
Mr. Lai’s arrest was the most high-profile yet under a new national security law China imposed on Hong Kong. Scenes of police officers searching Apple Daily offices, which were streamed live by some of the newspaper’s staff Monday, heightened fears about the future of a free press in Hong Kong.
His arrest galvanized support around the city. Scores of Hong Kongers lined up early Tuesday to purchase copies of the daily, which bore the front-page headline, “Apple Daily will fight on.”
The stock price of Next Digital Ltd., which publishes the newspaper, surged after Mr. Lai’s arrest to its highest level in more than seven years, up 1,150% this week. They were helped by opposition supporters’ calls to rally behind the stock. The company’s market capitalization now stands at around 2.9 billion Hong Kong dollars ($374 million), larger than USA Today owner Gannett Co. ’s $241.26 million.
Mr. Lai’s bail was set at HK$300,000 (US$38,708), along with a HK$200,000 surety, the South China Morning Post reported. Earlier Tuesday, police officers took a handcuffed Mr. Lai to search his yacht. Responding to media questions about his treatment in police custody, Mr. Lai said it was “so-so” and that he could “tough it out,” Apple Daily reported.
The national security law, which took effect June 30, places special emphasis on preventing foreign influence in Hong Kong affairs and makes lobbying overseas governments for sanctions and other measures a crime. The law is explicitly not retroactive.
The series of arrests Monday morning included Mr. Lai’s two sons and four employees from his publishing company. Police said late Monday the arrests were part of an investigation into foreign collusion and alleged fraud.
China’s enforcement of the national security law has been one factor contributing to the rapid deterioration of relations between the U.S. and China, and Mr. Lai’s arrest in particular has drawn condemnation from other countries, including the U.S.
In a statement Monday, the Hong Kong and Macau Affairs Office of the State Council expressed support for the arrests. Punishing Mr. Lai “is an inevitable requirement of the rule of law,” it read.
“Justice may be late, but it will never be absent,” read the statement, which said that Mr. Lai had used his media outlet to create and spread rumors, incite and support violence and contribute to “anti-China chaos in Hong Kong.”
Mr. Lai, who is in his early 70s, could often be seen at protests that gripped the city for much of last year. Ignited by opposition to a proposed extradition bill that would have allowed criminal suspects to be tried on the mainland, the demonstrations became a wider antigovernment movement with protesters calling for greater democracy in the semiautonomous Chinese city, among other demands.
Many protesters considered the colorful and dogged Apple Daily a must-read, and the paper at times printed posters that were used as placards during demonstrations.
Mr. Lai was already facing charges before his arrest, including unlawful assembly, for participating in one of the protests. Charges under the new national security law potentially carry heavier penalties—up to life in prison.
Apple Daily is set to apply for a court order to temporarily ban police from accessing content seized during Monday’s newsroom raid, on the basis that the documents include journalistic material that law enforcement isn’t authorized to read, the paper reported Tuesday.
Ms. Chow, who was released late Tuesday, told reporters outside the police station that officers had told her she had been arrested for using social media to collude with foreign powers after the national security law came into effect.
“The political prosecution this time is very ridiculous,” she said. “It is obvious that the regime and the government is using the national security law to suppress political dissidents.”