The company publishes Apple Daily and Next Magazine, two of the city's most popular publications. "The lawyer is rushing there".
But in China's state media he is a "traitor", the biggest "black hand" behind last year's protests and the head of a new "Gang of Four" conspiring with foreign nations to undermine the motherland. She previously pleaded guilty to illegal assembly charges.
The 10 arrested remained in police custody late Monday and police can deny bail under the new law.
Lai, who also holds United Kingdom citizenship, is the second target picked up by the newly created Office For Safeguarding National Security in Hong Kong, set up to implement the NSL and answerable to Beijing.
He was 12 years old when he fled his village in mainland China, arriving in Hong Kong as a stowaway on a fishing boat.
The law targets secession, subversion, terrorism and colluding with foreign forces with punishments up to life in prison.
He said police searched the homes of Lai and his son and detained several other members of the media company. The Standing Committee of the National People's Congress, China's top legislative body, is meeting in Beijing and expected to discuss issues arising from the postponement this week.
In a Reuters interview in May, Lai pledged to stay in Hong Kong and continue to fight for democracy.
Mark Simon, a Next Digital executive and Lai's aide, said Lai was charged with collusion with foreign powers.
"This has sent out a very negative message and, of course, must have a chilling effect on people who want to speak out, particularly on the news media", said Emily Lau, a former legislator and retired journalist.
"They arrested him at his house at about 7 am".
He worked his way up from working in a Hong Kong sweatshop to starting a multi-million dollar empire in a span of a few decades, becoming one of Hong Kong's richest residents.
"We can't worry that much, we can only go with the flow", Lai said, before being escorted into a police vehicle.
Lai, 71, was led away in handcuffs and arrested along with six others on suspicion of colluding with foreign forces - one of the new offences under the law - and fraud.
The arrests brought strong condemnation from foreign governments. Critics have decried the law is being abused to suppress free speech, civil rights, political activity and academic independence.
Also on Monday, Beijing rolled out expected retaliatory sanctions on 11 US officials, including Republican senators Marco Rubio and Ted Cruz. But they did not elaborate on their alleged violations of the law. Last year, the newspaper frequently urged readers to take part in the anti-government protests. In February, Lai was arrested along with other pro-democracy advocates for a largely peaceful protest in August 2019 but the charges were later dropped.
The national security law imposed on Hong Kong by Beijing came into force on June 30, the eve of the 23rd anniversary of the handover of the ex-British colony back to China.