Hong Kong pro-democracy news outlet Stand News and its two former chief editors were found guilty of sedition on Thursday, the first conviction of its kind since the city came under Chinese rule in 1997.

The verdict is the latest blow to news media in the former British colony, which has seen its standing plummet over the past two decades from 18th place to 135th in press freedom rankings compiled by Reporters Without Borders.

Stand News, a Chinese-language website, gained a massive following during Hong Kong's huge and sometimes violent pro-democracy protests in 2019, before shutting down in 2021 following a police raid.

On Thursday, district court judge Kwok Wai-kin found former chief editors Chung Pui-kuen and Patrick Lam guilty of "conspiracy to publish and reproduce seditious publications".

The parent company of Stand News, Best Pencil Limited, was also found guilty of the charge.

"The line (Stand News) took was to support and promote Hong Kong local autonomy," according to a written judgement by Kwok.

"It even became a tool to smear and vilify the Central Authorities (Beijing) and the (Hong Kong) SAR Government."

Lam, who was 34 when he was charged, was absent from court on Thursday due to illness, and his lawyers agreed for the verdict to proceed.

More than 100 people, including supporters and media professionals, queued up at the court building to witness the ruling.

'All around attack'

Lau Yan-hin, former design chief of Stand News who was among those waiting for a spot in the public gallery before the ruling, called the trial an "all-round attack" on the media.

"It made you confused with what can be said and what cannot be said, creating further chilling effects and leaving you incapable to tell where are the limits," he said.

A former veteran journalist, who preferred not to be named, called it a "landmark case on the crackdown of press freedom".

"(Chung) merely did what a normal journalist would do, and in the past that would not lead to criminalisation and imprisonment," he said.

Officials from various consulates -- including the United States, Britain, France, European Union, and Australia -- were also in attendance during the ruling.

The United States has repeatedly condemned the prosecutions of journalists in Hong Kong, saying that the case against the Stand News editors "creates a chilling effect on others in the press and media".

In a trial that lasted nearly 60 days, prosecutors cited 17 Stand News articles as evidence, including interviews with pro-democracy activists and opinion pieces bemoaning the decline in freedoms.

Chung, 54, testified that the outlet was a platform for free speech and defended his decisions to publish articles critical of the government.

But prosecutors accused them of bringing "hatred or contempt" to the Chinese and Hong Kong governments.

The sedition offence has its roots in British colonial rule. It had not been used for decades until authorities dusted it off in 2020 to target government critics.