A Hong Kong media magnate highly critical of China is selling one of his Taiwanese companies to a group headed by a local businessman whose family has substantial interests on the mainland.

A source at Hong Kong-listed Next Media Ltd said Tuesday that Jimmy Lai would sell Next Media Entertainment Services Ltd. to a group headed by Jeffrey Koo Jr. for New Taiwan dollars 17.5 billion ($580 million).

The source spoke anonymously because he was not authorized to discuss the deal.

The development comes on the heels of pro-China Taiwanese newspaper publisher Tsai Eng-meng's attempts to complete a $2.4 billion deal for a cable TV network system, underscoring growing Chinese influence on the island of 23 million people, especially in the free-wheeling media, where there is increasing soft-peddling of issues concerning China.

Tsai's outspokenly pro-Beijing China Times newspaper balks at almost all direct criticism of the mainland. But even pro-opposition TV outlets sometimes dampen anti-China coverage amid efforts to complete potentially lucrative Chinese-language programming deals with Chinese media companies.

"Taiwanese news media have more or less imposed self-censorship on China criticism because many of their owners have either personal or company investments on the mainland," said Lo Chih-cheng, a political scientist at Taipei's Soochow University.

Next Media's stable in Taiwan comprises the highly profitable Apple Daily newspaper, Next magazine, a muckraking weekly often critical of Taiwan's China-friendly government, and an Internet TV station.

Lai retains his flagship Hong Kong newspaper — also called Apple Daily — which regularly rattles Hong Kong's Beijing masters with its hard-hitting denunciations of communist rule.

Koo's father is the chairman of Chinatrust Financial Holding Co., which recently received approval to begin operations in China. The Koo family has a number of other business interests on the mainland, as do most of the island's leading families.

Taiwan split from the mainland amid civil war in 1949, and ever since has been waging a quiet battle to maintain its de facto independence in the face of unremitting efforts by Beijing to bring it back in the fold. However, President Ma Ying-jeou in the 4 ½ years he has been in office has sought to tighten Taiwan's relationship with China, which has been strongly opposed by one of the island's three major newspapers and two of its eight cable TV stations.

Next Media's Apple, while critical of China has not been stridently opposed to Ma's policy and has largely been independent, although it focuses less on politics and more on tabloid-type news.

At the other end is Tsai's China Times newspaper, which openly supports Ma.

Tsai, whose China food business is the basis of a fortune recently estimated by Forbes Magazine at $8 billion, raised hackles earlier this year when he told the Washington Post that China's 1989 crackdown on pro-democracy protesters near Beijing's Tiananmen Square didn't produce anywhere near the number of casualties attributed to it in media reports, including those from Taiwan.

Today 40 percent of Taiwan's trade is with China and the mainland has attracted $140 billion in Taiwanese investments. An estimated 1 million Taiwanese live on the mainland, and more than 2 million Chinese tourists visit Taiwan annually.


Associated Press writer Kelvin Chan in Hong Kong contributed to this report.