Shares in ecommerce group Alibaba, founded by Jake Ma, plummeted, while Beijing publicly announced the hand of regulatory failure in its recent salvo against China’s richest man.
The remarks by Pan Gongsheng, vice governor of the People’s Bank of China, were published on the central bank’s website on Sunday and come as the country’s authorities continue to put pressure on Mr Mana’s business empire.
Alibaba’s stock plunged 7.3 percent in early Hong Kong trading, hitting its lowest level since July. Reprimands from the PBOC on Monday challenged Alibaba’s move to increase its two-year share buyback program from 6 6bn to bn 10bn.
Since the end of October – when Mr. Mae publicly criticized the country’s financial regulators and state-owned banks – the company’s shares have fallen more than 25 percent – about 26 260 billion from Alibaba’s market capitalization. According to Bloomberg data, once the richest man in China, Mr. Ma’s personal fortune fell from $ 62 billion to 49 49.3bn.
B 300bn
The minimum valuation of the ant group suggested before its volatile IPO
Beijing also withheld a initial 37bn initial public fur through anti-group, Alibaba’s finance online finance unit, following Mr Mani’s remarks. This has led to criticism of the alleged monopoly by both public companies, state media and government companies.
China’s market regulator announced last week that it would launch an antitrust investigation into Alibaba, while Ante confirmed that it had been called to a meeting with the PBOC and three other regulators.
Mr Pan’s comments, posted a day after representatives of the PBOC and Ants met in Beijing, drew investors’ attention to the financial services group. Ant was trying to restructure its business in an effort to relaunch its IPO next year.
Mr. Pan’s attack, however, confirmed just how difficult the task would be. He said Anten would have to “get back to its roots” as a payment services provider and “improve” its fast-growing and very attractive customer credit and asset management operations. Ante has started that process in recent weeks but investors expect it to reach a valuation of the company if it is able to return to the market.
Ant’s IPO would be the largest in the world and the company would be worth more than bn 300bn.
Analysts are unsure whether a restructuring will satisfy regulators or whether Ant will have to sell or close some of its consumer-financing operations. The latter has been sharply criticized by state-owned banks, arguing that ants have benefited from a series of regulatory oversight.
The parallel action against Alibaba, listed in Hong Kong and New York, has put more pressure on Mr Ma, who founded the group almost two decades ago in Hangzhou, the capital of eastern China’s Zhejiang province.
Following the disclosure of its Alibaba investigation by the State Administration of Marketing Regulation on December 24, Zhejiang officials confirmed that they had visited the company’s employees and taken materials from the group’s headquarters. Zhejiang’s governor, Zheng Shanji, said on Friday that the investigation was not intended to start a “winter” for online companies, but would instead mark a new “starting point” for the region’s development.
Additional reporting by Xining Liu and Ryan McMaro in Beijing
