Jack Ma’s fall from grace with Beijing echoes the fate of China’s previous richest man: commentator

Published (HKT): 2021.01.05 06:55

Alibaba Group will probably be condemned by Chinese anti-monopoly regulators as a way of punishing billionaire Jack Ma, just as Beijing disciplined the country’s previous richest man, according to a political analyst.

Commentator Johnny Lau said the anti-monopoly probe shows that Ma has clearly lost the trust of China’s central leadership, coming after the abrupt halt of Ant Group’s mega initial public offering late last year.

Ma has little bargaining power left to save himself from a fall from grace, and seems doomed to mirror the downfall of Wang Jianlin, who was China’s richest man until he offended Beijing a few years ago, Lau said.

Even though Ma joined the Communist Party in his early days, stepped down from the chair position at Alibaba in 2019 and has reportedly surrendered part of Ant Group’s portfolio to the central government, Beijing still does not trust him and has continued with its investigation, Lau noted.

Beijing may be worried about Ma’s connections with various political figures, and may be using the anti-monopoly investigation to sever his ties with those figures, Lau said.

The State Administration of Market Regulation kicked off the investigations into Alibaba’s alleged monopolistic conduct just before Christmas, and Lau believes Alibaba will probably be found guilty. “It’s only a matter of how heavy the penalty will be,” he said.

Ma has probably run out of bargaining chips, and can only wait for Beijing’s verdict, Lau said.

Beijing’s actions against Ma began after the world-famous tycoon said publicly, during a high-level forum at the end of October, that China “doesn’t have a systemic financial risk [...] the risk is instead from lacking a system.”

Lau believes the fate of China’s former tech poster boy might mirror that of Wang, who built his fortune on real estate development. He expanded his investments abroad, buying out the AMC theater chain, the largest of its kind in the United States, as well as investing in Hollywood studios and building his own very large studios in Qingdao.

Wang boasted in public that nobody could tell him where to invest his money. During the five years of his peak from 2012 to 2017, he reportedly invested 250 billion yuan (US$38.6 billion) abroad.

“Whether it is a state-owned enterprise or a private company, nobody [else] can take the lead in any industry where Wanda is present,” he said in 2017.

But Wang’s high-profile statements drew unfavorable attention from Beijing. His overseas investments were investigated and Beijing used its propaganda machine to accuse him of smuggling cash out of the country.

Soon banks refused to back Wang’s investments, forcing him to sell off his company’s assets to settle his debts. The tycoon has kept a low profile since then.

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