China has stepped up its campaign to rein in the vast tech empire controlled by Jack Ma, co-founder of Alibaba and one of the country’s richest people.
Officials in Beijing, who were on Christmas Eve, ordered an investigation into allegations of “monopolistic practices” by Mana Ma online retail giant, now ordering its financial technology company Ant Kit Group to begin operations.
Pan Gongsheng, deputy governor of China’s central bank, said Antony’s corporate governance was “not sound” and ordered him to “return to his roots” as a payment services provider.
Pan, who called Ants’ representatives at a meeting with regulators in Beijing on Saturday, said Ants should “drastically improve illegal lending, insurance and asset management financial activities.” The ant departments that provide those services are the fastest growing and most profitable operations of the business, analysts said.
In a statement, Ant Ant Group said it would establish the “reform working group” and “full implementation requirements” sought by the regulator.
“We will increase the scope and intensity of openness to win-win collaboration, review and improve our work in protecting consumer rights, and broaden our sense of business compliance and social responsibility,” the company said. “Ant will make its improvement plan and working schedule in a timely manner and seek the guidance of regulators in the process.”
The recent Salvo in Beijing’s battle against Ma – who played the role of China’s greatest modern entrepreneur until he started speaking out against strict rules – destroyed 8% of Alibaba’s share price in Hong Kong trading on Monday.
Alibaba’s stock has lost more than a quarter of its value since October 24, when Mae accused China’s financial regulators and state-owned banks of pursuing a “five-drug” mentality at a high-profile summit in Shanghai.
Chinese Communist Party officials accused Mani of violating various rules and intervened to stop Ant Group’s bn 37bn (b 27bn) flotation just two days before the deal began in Shanghai and Hong Kong.
According to the Bloomberg Billionaires Index, the impact on Mani’s business activities has wiped out more than 10 10 billion (7. 7.4 billion) from his fortune, leaving him second on the list of China’s richest people with an estimated b 49bn. The richest man in China is now Pony Ma (no affiliation), chairman and chief executive officer of rival tech company Tencent.
Fisher Zhang Zhihua, chief investment officer at Asset Manager Beijing Uni Asset, said investors were concerned that Beijing’s campaign against Ma’s companies would continue even if they implemented all necessary changes. “The anti-trust investigation in Alibaba has yet to mention the penalty, which is of great concern to investors,” he said.
Li Chengdong, a Beijing-based technology analyst, said the lawsuit against Antony also weighed heavily on other Chinese tech companies. Lee said the new rules are hurting major Internet platforms, so Tencent and other tech companies are also seeing their share prices go down. “Alibaba is now the target of regulators so the reaction is stronger.”
The day before Christmas, China’s state market inspection administration said it had ordered an investigation by Alibaba Group Holdings Limited into “suspicious monopoly practices”.
An editorial in the mouthpiece of the People’s Daily Chinese state said that efforts to curb anti-monopoly and anti-rival practices are “necessary to improve the socialist market economy and promote high-quality development.”
“This investigation does not mean that the country’s attitude towards the promotion and support of the platform economy has changed.”
Analysts and policy experts said Beijing’s action against Mae’s companies is likely to have been triggered by a blunt speech at the Bund Summit in Shanghai on October 24, criticizing excessive regulation and the state’s dominance of banking.
“We should not use the way we operate a train station to control an airport,” Mae said, according to a transcript. “We cannot regulate the future through yesterday.
Mae, who started Alibaba in a one-bedroom flat in China 21 years ago, said it was impossible to support the economic demand for global growth in the next 30 years. “We must take advantage of our technological capabilities today and build a credit system based on big data to get rid of the Panshop mentality.”
Ma was speaking with senior officials such as Wang Kishan, former security tsar and right-hand men of Chinese leader Xi Jinping; Chinese Central Bank Governor Yi Gang; And Deputy Minister of Finance Xu Jiai. Mani’s comments went viral on Chinese social media and were seen as a direct attack on government officials.
In November, the Ant Group was preparing to make the world’s largest initial public offering fur when it was abruptly shut down by Beijing, trading 48 hours earlier in Shanghai and Hong Kong. Prior to the suspension, investors valued Antony val 316bn (4 4,234bn), one of the largest banks in China and the U.S. And higher than the UK assessment.
At the time, Hulton was blamed for “changes in the financial technical regulatory environment and other key issues”, but analysts interpreted the intervention as a warning to believers.
“The party has once again reminded all private entrepreneurs that no matter how rich and successful you are, you can pull the mud from under your feet at any time,” wrote Bill Bishop, author of China-centric newsletter Sinosism.
