These questions arise following the appearance in court yesterday of three newspaper executives accused of a conspiracy to defraud, by artificially inflating the circulation figures of the English-language Hong Kong Standard newspaper.
The executives were charged after an investigation by the Independent Commission Against Corruption (ICAC), which found that they had conspired with Sally Aw Sian, the newspaper's owner, to defraud the advertisers. However, no charges were laid against Ms Aw, one of Hong Kong's best-known newspaper owners - and a prominent member of the Chinese People's Consultative Committee, a political advisory organ of the Chinese government.
Although the ICAC has made public its allegation against Ms Aw, the Department of Justice has declined to act. This has caused uproar in Hong Kong, where preserving the rule of law is seen widely as a litmus test of the credibility of the post-colonial administration.
Demonstrators gathered outside the Department of Justice's office yesterday to protest. Martin Lee, the leader of the Democratic Party, said the failure to prosecute "cries out for an explanation".
Even normally docile members of the non-elected Provisional Legislature have voiced their misgivings and will be holding a meeting with Elise Leung, the Secretary of Justice, next Monday to seek an explanation.
Yesterday, Ms Leung's office issued a statement saying "this department does not consider the personal connections or political status of any suspect. In this particular case, these principles have been scrupulously observed".
Ms Aw controls the Sing Tao publishing empire which used to back the staunchly anti-Communist government in Taiwan. It switched support to Peking more than a decade ago. The Sing Tao group then became the first overseas publisher allowed to publish a newspaper in mainland China.
The situation is further complicated by the strong links between Ms Aw's family and Tung Chee-hwa, Hong Kong's Chief Executive. His family also used to be firm supporters of Taiwan and he sat on the Sing Tao board of directors for eight years.
Mr Tung declined to comment directly on the case but said, "the decision to prosecute or not rests entirely with the Secretary for Justice".
Last week, Mr Tung provoked protests when he dismissed another controversial decision. This time, it was not to prosecute the New China News Agency, which used to act as Peking's de facto embassy when Hong Kong was still a British colony and was widely believed to monitor the political stance of Hong Kong people.
The agency had breached the privacy laws but did not even get a reprimand. Mr Tung said that the matter was a mere "technicality".Reuse content