9 September 2024 – Mark Clifford, President of the Committee for Freedom in Hong Kong Foundation (CFHK Foundation) and former member of the board of directors of Next Digital, which published the Apple Daily newspaper in Hong Kong, today released a copy of a human rights complaint against the global auditing firm BDO filed with the Organization for Economic Co-operation and Development (OECD).
BDO, a Top 5 public accounting firm with operations in Hong Kong, is accused of violating business standards and human rights standards against media company Next Digital and its Apple Daily newspaper. Mark Clifford is joined in submitting this complaint by another former Next Digital Director, Mr. L. Gordon Crovitz. This comes in the same week that the US have released an updated Hong Kong Business Advisory stating that “businesses should be aware that the risks they face in the People’s Republic of China are now increasingly present in Hong Kong.”
The Hong Kong government in 2021 forced Next Digital to close Apple Daily, the city’s leading pro-democracy newspaper, by freezing is bank accounts, before being forced into liquidation itself. Seven of its senior executives, including founder and British citizen Jimmy Lai, have been imprisoned by Hong Kong authorities for more than three years.
The complaint accuses BDO of enabling these human rights abuses by providing essential services to the Hong Kong government through its role in investigating Next Digital. It also accuses BDO of violating the OECD “Guidelines for Multinational Enterprises on Responsible Business Conduct,” which sets out standards for responsible business practices and creates a system for reviewing complaints about violations of the guidelines. The complaint alleges that BDO “has actively participated in the suppression of the free press, the persecution of journalists and media professionals, and the destruction of private property—here, the valuable media properties of [Next Digital] including its hugely popular Apple Daily—in Hong Kong. These violations of basic human rights have happened with no substantive involvement of any court and without any or any adequate judicial review.”
On July 28, 2021, BDO managing director Clement Chan accepted the appointment from the Hong Kong Financial Secretary as a Financial Inspector to investigate Next Digital. Mr. Chan was appointed and tasked with delivering a report within six months. Instead, his appointment has been extended by the Hong Kong government for a fifth consecutive period and will run until at least Jan. 27, 2025. There has been no explanation for this long-extended delay.
The complaint makes clear that the shuttering of Apple Daily and the liquidation of Next Digital were due entirely to the actions of the Hong Kong government operating under the National Security Law, not to any actions by Next Digital, its directors or executives. The Hong Kong government froze Next Digital’s assets, including its cash, so that the company could no longer operate, making it a crime for the company to pay its reporters. It also shut off funding by ordering banks to stop processing credit card payments from the media company’s nearly 600,000 subscribers.
Mark Clifford, President of the CFHK Foundation said:
“It’s completely outrageous and shows the state of Hong Kong today, that a global accounting and auditing firm would allow one of the senior managers to work for the Hong Kong government in organizing the shutting of a newspaper, owned by British citizen Jimmy Lai, and have a hand in freezing their bank accounts which left o hundreds of people without jobs or access to salaries, and pensions.
BDO should immediately cease working for the Hong Kong government as Financial Inspector and should apologize to the people of Hong Kong and to the many clients and staff of BDO who must be aghast to learn of the role BDO chose to play in censoring the free flow of information that had made Hong Kong among the most successful and admired economies in the world.”
Notes to Editors:
Dr. Clifford and Mr. Crovitz are U.S. citizens now based in New York. Before serving as directors of Next Digital, Dr. Clifford was editor-in-chief of major Hong Kong newspapers including the South China Morning Post and the Standard, while Mr. Crovitz was the Hong Kong-based chairman of Dow Jones in Asia and later served as publisher of The Wall Street Journal.
In February 2023, the United Kingdom’s All-Party Parliamentary Group on Hong Kong issued a report critical of BDO for having “taken a leading role in both suppressing freedom of speech in Hong Kong as well as undermining the rule of law and the regulatory system for corporate finance.”
The report said that accounting firms such as BDO, which had benefited from Hong Kong’s transparent legal system and free flow of information, should be held accountable for actions that undermine the rights of its people and companies. “Contrary to the choice made by managing director Chan to take on the role of special inspector against Next Digital, BDO as a firm claims one of its core values is to act in a socially responsible way,” the report said. “By allowing one of its managing directors to act against Apple Daily, BDO has taken a path that diverges dramatically from the commitments to act in a socially responsible manner made by other top global accounting firms.”
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