CORRECTED-HK anti-graft agency raids home of media tycoon critical of Beijing

Thu Aug 28, 2014 2:30am EDT

(Corrects 10th paragraph to say Next Media, not anti-graft agency and Lee, not Lai)

By Farah Master and Clare Baldwin

HONG KONG Aug 28 (Reuters) - Anti-corruption officers in Hong Kong on Thursday morning raided the home of Jimmy Lai, a media magnate and an outspoken critic of Beijing who has supported pro-democracy activists through his many publications.

The raids come after local media said on Wednesday that China had decided to limit 2017 elections to a handful of candidates loyal to Beijing, a move likely to escalate protests by pro-democracy activists.

"The timing is not uncoincidental with this week in our opinion. If you wanted to cool things down, this is the last thing you would do," Lai's top aide and spokesman Mark Simon told Reuters. Simon added that five anti-graft officials had also searched his home.

Hong Kong's Independent Commission Against Corruption declined to comment. Trade in Lai's Next Media Ltd was halted after the stock fell as much as 6 percent.

The raid comes on the heels of e-mails leaked to Hong Kong newspapers this month which highlighted details of payments that Lai made to the pro-democracy Occupy Central movement. The protesters have threatened to lock down the financial district if Beijing does not grant a fully democratic election for the city's next leader in 2017.

It is not illegal in Hong Kong to receive political donations.

Lai's popular Apple Daily tabloid also reported that anti-graft officers also visited the home of Labour Party lawmaker Lee Cheuk-yan and removed bank documents. Lee was among the activists arrested on July 2 at a protest billed as a rehearsal for the Occupy Central movement.

A copy of one of the search warrants seen by Reuters gave permission for the ICAC to search for items including bank and electronic records related to payments or donations made by Lai to Labour Party officials, including Lee.

The warrant also stated it was looking for a connection between payments or donations and a Legislative Council discussion in January about "safeguarding editorial independence and autonomy".

Simon said Next Media had not discussed press freedom issues with Lee.

In July last year, Apple Daily said tens of thousands of copies of two editions of the newspaper had been torched by masked men targeting distribution points. Lai's home was also rammed by a car and the assailants left a machete, an axe and a threatening message in the driveway, it said.

Reporters and camera crews thronged the area outside Lai's home in an affluent avenue in Hong Kong's Kowloon district early on Thursday. He owns a wide range of publications including Next Magazine. (Additional reporting by Grace Li; Editing by Anne Marie Roantree and Edwina Gibbs)