Hong Kong security secretary John Lee threatened to jail bankers of Apple Daily founder Jimmy Lai for any dealings with his accounts, Reuters reported Thursday.

In letters to Lai and local branches of HSBC and Citibank, seen by Reuters, Lee warned that any transaction could result in up to seven years in prison. They include assignment or conversion, their use as collateral or their transfer to or from Hong Kong.

The letters were sent this month, after authorities used the National Security Act to freeze nearly 500 million Hong Kong dollars (US $ 64 million) in assets belonging to Lai, including his shares in Next Digital and funds in the local bank accounts of three companies owned by it.

Speaking on Thursday, Lee admitted he sent letters to both banks and described it as his responsibility to remind those involved that processing Lai’s account could result in fines.

The security chief added that the freezing of Lai’s assets was due to his alleged breaches of the National Security Law. “It has nothing to do with normal business operations. Normal business people will not commit acts that endanger national security. The two should not be discussed together, ”he stressed.

A Hong Kong-based Citibank spokesperson noted that the bank is required to comply with all applicable laws, while an HSBC spokesperson in Hong Kong declined to comment.

Quoting a financial adviser to Lai, the article reported that the funds “represented the Hong Kong leadership of a global network of banking relationships spanning his private wealth.” Advisors are also looking for ways to challenge the freeze.

Extending the crackdown on the National Security Law to elite levels of the banking and financial industry, the unprecedented move has added to concerns about the investment climate in Hong Kong, private bankers and corporate lawyers have said. .

Although the majority of Lai’s wealth is offshore, including in the form of properties in Taiwan, hotels in Canada, and US stocks, the latest order would make it difficult for the mogul to transfer funds to Hong Kong and support the operation of Next Digital. .

In a statement Wednesday, the media group said it had sufficient working capital to operate for at least 18 months without additional funding from Lai. Shares of Next Digital climbed to 330% on Thursday, as they resumed operations nearly two weeks after the government imposed an asset freeze on Lai.

One adviser described the move as “a big wake-up call” for the wealth management industry given the sweeping reach of the law. “By trying to nail Jimmy Lai and Apple to the wall, they might just nail this industry too,” he added.

A senior banker has insisted that wealth stored abroad is safe because it falls under another jurisdiction, but Lai’s case may undermine confidence in this arrangement. Another banker notes that an increasing number of clients are diversifying their risk by storing their wealth in different locations near Hong Kong.

The 73-year-old media mogul, who is serving a 14-month prison sentence for a peaceful protest in August 2019, faces a growing number of charges including fraud and collusion with foreign forces under the law on national security.

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