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UPDATE 4-HK's Apple Daily owner Lai punished for exercising fundamental rights-UN's Bachelet

(Recasts with UN human rights chief)

By Sharon Abratique and Pak Yiu

HONG KONG, June 24 (Reuters) - U.N. human rights chief Michelle Bachelet took aim on Thursday at the "negative consequences" she said Apple Daily owner Jimmy Lai faced for exercising his rights, criticising the tycoon's detention as his pro-democracy tabloid printed its last edition.

Apple Daily closed down on Thursday, forced to end a 26-year run amid a national security crackdown that froze the company's funds. Its closure prompted snaking queues of hundreds of loyal readers at news stands across the city.

Lai, its owner and staunch Beijing critic, has been in jail since December over unauthorised rallies during Hong Kong's mass pro-democracy protests in 2019 and faces national security charges.

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Speaking via video link at the 2021 Society of Publishers in Asia press awards ceremony held in Hong Kong, Bachelet said the new national security law was leading journalists to "self-censor" to avoid clashing with "vaguely formulated offences."

In pre-recorded remarks, she singled out Lai and award-winning Maria Ressa in Philippines, whose Rappler website has put President Rodrigo Duterte under tough scrutiny and who was convicted of libel last year.

“Maria Ressa and Jimmy Lai have faced negative consequences for the exercise of their fundamental human rights," Bachelet said.

Hong Kong's government did not immediately respond to a request for comment outside office hours.

Apple Daily was an unapologetic tabloid that mixed pro-democracy discourse with celebrity gossip and investigations of those in power. It had been a thorn in Beijing's side.

In anticipation of robust demand for its final print run, it printed 1 million copies, or more than 10 times its usual.

Emotions ran high on Thursday among supporters of the paper, which has faced an unrelenting squeeze since Lai was arrested in August 2020.

"I couldn't sleep well for the past few nights," said Tse, 60, a former medical worker, who leaned on a cart to support herself as she queued outside a newspaper vendor. "I hope reporters can stay true to their faith and keep working hard."

The shutdown deals the most serious blow yet to Hong Kong's media freedoms and could potentially destroy the city's reputation as a media hub after Beijing imposed the security law on the financial centre last year, media advocacy groups say.

Critics of the law say it is being used to crush dissent in the former British colony, an assertion authorities reject.

Officials in Hong Kong and China have repeatedly said media freedoms are respected but are not absolute.

Some staff expressed anger and frustration at the shutdown.

"(After) today, there is no press freedom in Hong Kong," said Dickson Ng, 51, a designer at the paper.

"I feel very disappointed and angry today. I don't understand why our limited group, company, and the newspapers were forced to stop operating under such circumstances."

'BOTTOM LINE'

The Chinese foreign ministry said rights and freedoms could not jeopardise national security.

"Hong Kong is a society that has rule of law...No one or no organisation is above the law," a ministry spokesperson said. "All rights and freedom, including media freedom, cannot go beyond the bottom line of national security."

Last week, 500 officers raided the newspaper's headquarters, with live feeds showing authorities sifting through reporters' notes and other journalistic material in scenes that drew international condemnation.

Five executives were arrested and two - chief editor Ryan Law, 47, and Cheung Kim-hung, 59 - were charged with conspiracy to commit collusion with a foreign country and denied bail. On Wednesday, a 55-year-old columnist for the paper was also arrested under the national security law.

Authorities froze the assets of companies related to Apple Daily, which senior executives said left it unable to operate.

Lai has emerged as one of the highest-profile targets of the new law and is facing three national security charges, including colluding with a foreign country.

He has been in detention since December, denied bail under the security law and already serving several sentences for taking part in unauthorised rallies, including during the global financial hub's mass pro-democracy protests in 2019.

(Reporting By Sharon Abratique; Writing by Anne Marie Roantree; Editing by Gerry Doyle, William Maclean)