The ruling was a surprise win for Lai, the 78-year-old founder of the now-defunct Apple Daily newspaper, who was sentenced to 20 years behind bars this month on collusion charges under a Beijing-imposed national security law.

The fraud case grew out of a contractual dispute and was unrelated to the charges he faced under the security law.

Lai did not appear in court and remains behind bars.

"(We) allow the appeals, quash the convictions and set aside the sentences," High Court Chief Judge Jeremy Poon said, adding that he granted Lai's application not to show up in court.

Prosecutors did not answer reporters' questions on whether the authorities will appeal.

AFP has contacted the Hong Kong government for comment.

In 2022, Lai received a jail sentence of five years and nine months over what the trial judge called a "planned, organised and years-long" scheme.

It remains unclear how Thursday's outcome affects Lai's overall prison stint.

The tycoon received 20 years in his national security case, with two of those years designed to overlap with his fraud case sentence -- which has now been quashed.

In the fraud case, prosecutors said at trial that a consultancy firm Lai operated for his personal use had taken up office space that Apple Daily had rented for the purposes of publication and printing.

This was in breach of the terms of the lease Apple Daily signed with a government company and amounted to fraud, prosecutors said.

But Poon ruled on Thursday that "the prosecution has failed to prove that the applicants had made the false representation as alleged".

Former Apple Daily executive Wong Wai-keung was also charged in the same case and jailed for 21 months in 2022.

Wong's conviction and sentence were also quashed on Thursday.