The head of the Arts Development Council (ADC), Kenneth Fok, said the statutory body has to minimise the risk of violating the law, including the national security law, when making funding decisions.
The ADC announced earlier that it was withdrawing its support for the Hong Kong Drama Awards, organised by the Federation of Drama Societies. The ADC said it'd received complaints about "inappropriate content and arrangements" in last year's event, damaging the council's reputation.
"I must stress that the council is not a law enforcement agent, we're not saying someone, something or what language used had violated the law," Fok said on Thursday.
"But as a distributor of public funds, our council members have a responsibility to minimise such risks."
The ADC announced deducting part of the funding for last year's ceremony. It will also pull funding for this year's event due to "intense competition and limited resources".
The Leisure and Cultural Services Department, meanwhile, said it would no longer provide a venue for the awards ceremony in 2024, saying it had taken into consideration various factors such as previous events staged by the organisers.
Lawmaker Johnny Ng, a former ADC member, said he believes the arts body would have debated the matter in accordance with established procedures.
Ng also said the ADC's decision may have to do with some of the guests invited to present the awards in last year's show.
"Traditionally, they will invite some very experienced artists, government officials or ADC members as presenters, but [last year] it was different," he said.
Satirical cartoonist Zunzi and journalist Bao Choy were among the guests in last year's ceremony.
Another lawmaker, Tik Chi-yuen, described the authorities' move as political censorship and said it risks stifling creativity.
"I think this is not the normal procedure. Suddenly, without any warning, the subvention was stopped. This is another 'red line'," he told reporters.
"This will affect workers in the arts and cultural sector. They will become conservative in works and performances."