joy and sorrow
A year ago, Zhang Zhenxin, who had been overindulging in alcohol, died without warning in a London hospital.
He was the actual controller of the “Pioneer Department” with a debt of 70 billion yuan. His sudden death took people by surprise, and also made its already burst Internet financial platform worse.
This is a symbolic event. The “Great Leap Forward” in the field of Internet finance has ended, leaving a mess everywhere. The “Pioneer Department” was the representative of the mouth of the wind, now collapsed, behind the thousands of investors are like ants on a hot pot.
Xu Min, An Ying, Liu Yiju, Han Jiayan, Li Fowei – I found these names among the victims of the “Pioneer Group”. They are just the most ordinary housewives in China, and Li Fowei is already in her sixties. They have invested hundreds of thousands or even millions of their family savings through Pioneer’s online platform. After the platform burst, they panicked more than anyone else.
The “Pioneer Department” to finance the enterprise very much. Following the clues on the platform, these people figured out where their part of the money ended up – a real estate company in Zhengzhou, Henan Province: the Vision Group and its related companies.
They tried to sue these companies in court under the name of “private loan disputes” in hopes of getting their money back. However, the local court in Zhengzhou rejected their claims on the grounds that the companies concerned had allegedly violated the financial management order, but not as part of a civil lawsuit.
They received feedback from the court shortly before. There is no positive and effective doorway for these housewives who are struggling to recoup their losses. They are still in a state of fear and torment.
However, few people know that the real estate company that got the money through the Pioneer online lending platform will make a fortune in Ma Yun’s Ant Group IPO feast.
Henan Vision Group, which is not well-known in the real estate industry, is only a little known in Henan. It had established close cooperation with Vanke and became a springboard for Vanke to enter the Henan market. During the market consolidation in the past two years, it has also made cash moves to sell projects to Rongcheng.
The owner of Meikei Group is Wang Xiaoxing, a woman who grew up in Zhengzhou’s municipal party committee and made her first bucket of gold through a Hong Kong company in the 1990s, moved back to Henan to enter the real estate industry, and also crossed over into diversified businesses such as aviation and wine. A few years ago, the acquisition of the U.S. Mooney Airlines, her highest moment of glory, this is the first successful acquisition of U.S. aircraft manufacturers by a Chinese private enterprise.In 2016, she in the circle of friends, her company launched the first aircraft, that was her Valentine’s Day gift.
In the same 2016, Jack Ma introduced the first strategic investors for Ant Group, and Wang Xiaoxing quietly entered the shareholder tier of Ant through its two shadow companies. CICC, China’s most local investment bank, built the path for these shadow companies to invest in Ant through its private equity platform.
With the upcoming IPO of Ant Group, these early investors are about to be rewarded handsomely. The beneficiaries include the original shareholders and management of Ant Group represented by Jack Ma, investment institutions represented by social security funds, CIC and major insurance companies, as well as the large group of entrepreneurs from Jiangsu, Zhejiang and Shanghai in Jack Ma’s circle of friends.
But the more profitable, in fact, hidden in the ant shareholders camp that a group of private equity funds, layers of penetration down, you can see behind the group of complex and complicated partners. Many of these investors, choose to hide their true identity, through family members or seemingly unrelated vest company to hold on behalf of. They are the ones dancing in masks at the ant listing feast.
Wang Xiaoxing, the Henan real estate businessman mentioned above, is a representative of these low-key revelers.
But in stark contrast, behind Wang Xiaoxing, there may be a much larger group of Internet finance victims. Like ants, they have worked hard for most of their lives, saving a small amount of savings, longing for a rich and decent life, but in the end did not get out of the strange circle of being harvested.
Ants and elephants may not be in the same dimension. The sorrows and joys of this world, for the most part, are not connected.
Feast.
There may be many “pioneers”, but only one Ant Financial.
When finance had the wings of the Internet and technology, the old pattern was crashed to pieces. Shadow banks stole the business of banks but weren’t constrained any more, while the occasional lightning in the industry left society as a whole to bear the cost.
Even so, Ma may still feel that something is holding back innovation, and he redefined risk at the recent China Forty forum, where he questioned the need to control leverage and said that the Basel Accords are a club for the elderly.
Incidentally, this board unit of the China Forum of Forty (CF40) is also one of the strategic shareholders of Ant Group. In this way, Ma was able to express his “professional views of non-professionals” on an equal footing with the country’s top economists.
Jack Ma had a very famous and harsh saying, “If the banks don’t change, we’ll change the banks”. And he did. Backed by Ali’s Ant Group, the more refreshingly unconventional the growth process, it is being chased by the capital all the way, the valuation is pushing up, and eventually become the largest that unicorn in the market. After the IPO, the market capitalization of this one company will account for 40 percent of the entire capacity of the board, surpassing the market capitalization of those large state-owned banks on the main board, and even surpassing Maotai in one fell swoop.
This is destined to become the most ambitious capital feast this year, or even within the next ten years.
The host of the banquet, of course, is Jack Ma. Although he has retired from Ali and is not involved in the actual operation of Ant. But by virtue of the partnership arrangement of several major shareholders (Hangzhou Junao and Hangzhou Junghan) in the shareholder structure, he is still the de facto controller of the Ant Group and will use the IPO to increase his personal wealth by hundreds of billions of dollars and further consolidate his position in the richest list.
Huang Qifan on where Ma’s spending money comes from: more than 3 billion in capital to get more than 300 billion
Six years ago, on the eve of Alibaba’s IPO, Jack Ma spun off Ant without the consent of major shareholders Softbank and Yahoo. This was once controversial at the time.
Electronic payment is a licensed field that has been subject to licensing regulations, and under the VIE structure, these licenses risk being controlled by foreign investors. Ma would rather bear the accusations of business integrity than challenge the regulatory bottom line. Of course, there may also be some selfishness – the main financial technology innovation of the ant, at that time was a promising future baby, it has more growth potential in the capital market than Ali.
In the end, Jack Ma appeased Softbank and Yahoo with subsequent compensation actions. And the spin-off, Ant, did not disappoint, and it ushered in an extremely rapid period of growth. Since 2015, Ma has planned several rounds of financing arrangements for Ant, bringing in several strategic investors including Social Security Fund, China Investment Corporation, China Life Insurance, Pacific Insurance, private equity funds under CICC, and private equity funds under Yunfeng.
Rather than the introduction of war investment, it is more like an invitation to a grand party issued by Ma.
In particular, the entry of Social Security Fund and CICC has made Ant no longer just a startup company. The Social Security Fund is the pension fund of the entire Chinese people, while CIC manages the national sovereign wealth fund, and their intervention is undoubtedly the ant at the beginning of the venture, early tied to the chariot of national interests.
In front of the chariot, a series of obstacles were voluntarily receded. From the first submission of the listing application, to successfully pass the meeting to agree to the issue, the ant only took less than 30 days, a speed that makes people jealous. Even if the ants through its Alipay to sell the IPO of the strategic placement fund, this apparent conflict of interest controversial behavior, it seems that it did not make much waves in the road to its listing.
This is destined to be a game that cannot be lost and cannot be lost.
There is no game that can’t be lost, and if there is, the ticket must be in the hands of the real players who have the power and background to make it happen. Ants early investors, are Jack Ma “invited” into the earlier, into the more profitable space. Analyzing the backgrounds of these investors, we can draw out Jack Ma’s unique genealogy in the capital world.
For ease of analysis, I’ve reordered the strategic shareholders and distinguished them by different color blocks.
Special attention should be paid to the private placement called Beijing Jingguan Investment Center, although its GP, Shanghai Tianzen Investment Management Co. But it is still easy to investigate, the real manager of this private placement: Bo Yu Capital.
Thus, the shareholders camp becomes very clear. Apart from those things that are visible to the naked eye, the focus should be on these four camps – Zhongjin, Boyu, Chunhua and Yunfeng. These platforms, as private equity managers, are each tasked with building investment structures for behind-the-scenes investors and, of course, with the success of Ant’s IPO, they themselves can get a piece of the pie.
No invitation is meaningless, and there is a great deal to learn from this. Even a hint of Ma’s subtle intentions can be seen, such as the introduction of CCTV as a shareholder. Compared with the millions and millions of advertisements in CCTV, the reciprocal model of “you become my shareholder, I let you earn billions” is much higher.
Go to a capital feast, has the order of interest distribution. In-house partners, early investors, later followers, option sharers, IPO new people, later receiver, probably can be corresponding to eat meat, gnaw bones, soup, lick a bowl, smell a smell, the last to go to the meeting, nothing to catch but to wash their plates.
The market’s excessive pursuit led to the market value of the abnormally high, but also to the early entry of the flesh eaters can not help but feel happy, the ant headquarters is a jubilant, everywhere filled with the air of financial freedom, the river property market should be sound and rose. In the end, there is only one ant. If you miss this one, you’ll likely never have it again.
shadow
You must not know Huang Rongping.
Lanpay (Shanghai) Investment Center, managed by a CICC company, is the fifth largest shareholder of Ant. With the listing of Ants, this early stake emits a rich fragrance that will bring hundreds of millions of dollars in revenue for Ms. Huang.
Huang Rongping is the wife of Xiao Feng. As a founding member of Bosera, Xiao Feng spent 13 years in management positions at the oldest qualified public fund. After leaving Boshi, he became vice chairman of Wanxiang Group, in charge of Wanxiang’s financial sector. He also served as chairman of the Zheshang Fund. Earlier in his career, Xiao Feng held key roles at the Shenzhen branch of the People’s Bank of China as well as at the Shenzhen Securities Management Office, where he was a senior veteran of the financial sector. Xiao Feng’s current interest is in blockchain, from a public offering bigwig to the godfather of the currency circle, and after a magnificent turn, he has had many interactions with Jack Ma.
Xiao Feng himself does not appear in the list of shareholders of the ant. I actually do not understand what the big brother is taboo. But that doesn’t prevent Xiao Feng from joining Ma Yun’s party, albeit wearing a mask.
Behind Ant, there are too many shadow shareholders like this one.
Hu Zuliu’s Chunhua Capital is actually owned by his sister, Hu Yuanman, in terms of equity. So, even though Chunhua Capital’s funds have strategically invested in ants, Hu Zuliu still acts as an “independent director” of the ant group, without any sense of conflict at all.
Zuliu Hu was once a benefactor of Jack Ma. Jack Ma’s earliest uncle is actually not Softbank, although he kept repeating the inspirational story of how to use six minutes to persuade Sun just. The initial investment Ma received, in fact, was from Goldman Sachs in 1999. That $4 million helped Ma through a rough start. Joe Hu was the head of Goldman Sachs Asia at the time.
Zhao Wei, a famous actress, also didn’t invest directly in Ant, but her mother, Wei Qiying, was a partner in Yunfeng’s fund, and after Ant’s IPO, Wei Qiying’s earnings were probably close to 10 figures. A few years ago, with the financial backing of the Tomorrow Department, Zhao Wei and Huang Youlong’s couple flipped the script in the capital market and eventually fell on their faces in the Wanjia Culture merger, with the Securities and Exchange Commission punishing Zhao Wei and Huang Youlong with a five-year ban from the securities market.
The punishment didn’t end there, but it didn’t seem to prevent Zhao Wei from making money from the securities market. What can you do if you repeatedly jump across the border under the watchful eye of the regulator?
Liu Guangxia is the wife of Zhu Baoguo, Wang Yulian is the mother of Yu Feng, Zhang Zhen is the daughter of Zhang Youcai, Shen Junyan is the sister of Shen Guojun, Jiang Weiqiang is the father of Jiangnan Chun …… analysis of the shareholders behind the ant, as if investigating the genealogy of these celebrities, it is really a different kind of harvest.
Ma Yun likes kung fu. He has paid for a microfilm called “Gong Shou Dao”, the film, he and the top domestic and foreign kung fu superstars over the move, the slightest bit of defeat. Jet Li is one of those who sparred with him. Ma has made no secret of his admiration for Taiji culture, and he and Jet Li have set up a cultural promotion company called Taiji Zen.
Jet Li himself was not involved in the investment in Ant. But several of Yun Feng’s funds have a partner: the Tianjin Jiade Asset Management Company, which points to Jet Li’s wife, Li Zhi, through various hidden connections.
Jack Ma likes to draw. A few years ago, Ma collaborated with oil painter Zeng Fanzhi on a painting called “Peach Blossom Garden,” which started at HK$1.3 million and eventually sold for HK$42.2 million at a Sotheby’s auction in Hong Kong. Just recently, Ma also painted a painting at Yan Zhi’s art bookstore, titled “Made for Wuhan,” while attending an event in Wuhan, where Zeng Fanzhi was also present.
Zeng Fanzhi did not directly invest in ants. But among Yunfeng’s partners who invested in ants, there was a man named He Lijun. He was Zeng Fanzhi’s early classmate at the Hubei Academy of Fine Arts, with whom Zeng Fanzhi co-founded several companies.
Ma also likes to drink alcohol and only drinks Maotai.
Now has fallen from grace, Yuan Renguo, a decade ago in Beijing set up a “Maotai Club”, also operates a high-end luxury clubs, in and out are all celebrities. After the eight rules, this club closed down, but “Maotai Club” still low-key existence. Ma Yun once became the vice chairman of the “Maotai Club”.
In the LP of Yunfeng’s funds, there is a company called the Tibetan Hongde Century Investment Company Limited, is the “Maotai Club” on behalf of. Through this company, through a variety of associations point to the “Maotai Club” behind the real talkers: Beijing Zhaode.
On the eve of the ant listing, Yunfeng Fund also set up a new private equity: Shanghai Yunfeng Rui hold investment center. Beijing Zhaode invested 150 million yuan to become the largest that LP. at present, this private equity has no action. But in any case, it will definitely not be a spectator of this capital feast.
rheology
Then play the music, then dance.
For the record, the above analysis of the background of Ant shareholders is based on the public material already available in the territory, and there is nothing insider. In that huge roster, what I wrote about is just the tip of the iceberg. And Ant actually has sizeable strategic shareholders outside the country, who entered Ant in 2018 and are having a bumper season of their own as Ant is about to go public simultaneously on H-shares.
The structures behind these foreign shareholders, which are largely based in offshore paradises such as the Virgin Islands, are difficult to penetrate with existing tools. Ant’s disclosures on the HKSE are not exactly exhaustive either. But overall, it encompasses the top offshore investment institutions, as well as the biggest Hong Kong island takers you can think of and never expect.
In the past, Chinese companies have had to rely on investors to list overseas, but this time, it’s a rare case of being tough. Even the posture has changed when it comes to allocating foreign shares. It’s absolute confidence – I’ll give it to you, you can only have it, don’t steal it.
In China, behind every feast, there are changes in the pattern of capital and power. From the beginning of the year to the end of the year, from the first light to the end of the cups and plates, from the cups and glasses to the bewilderment, from the prosperity to the dispersion, from the flying to the curtain, the backdrop of an era is mapped out.
It’s interesting to look at the attendees of this feast, and to mention the absentees as well.
Over the past few years, China has disposed of several gold-controlled groups that had accumulated huge risks, including the Tomorrow Group, Anbang Group, Huaxin, HNA and others. Putting aside Huaxin and HNA, and going back three or four years, it is absolutely impossible for Anbang and Tomorrow to be absent from an event of the scale of ants. In particular, tomorrow’s system, this is a ubiquitous financial empire, its penetration capacity is beyond your imagination.
But things are like smoke. Even the tallest building can fall down in a moment.
In Hu Zuliu Chunhua Capital Management Chunhua Jingcheng and Chunhua Xingan two private placement, there are still traces of Anbang. In the early days, the LPs of the two private placements were Anbang’s Harmony Health and Anbang Life, but recently, these names have disappeared and been replaced by “We All Insurance”. Despite the name change, but still can share the early investment income brought into the ant. It is believed that these gains will also largely mitigate Anbang’s liquidity risk.
Unlike Anbang’s facelift and re-emergence, Tomorrow’s department has completely withdrawn from the stage.
In July this year, several major licensed financial institutions under the Tomorrow Department were taken over. These include Tian An Life Insurance, Huaxia Life Insurance, Tian An Life Insurance, Yi An Life Insurance, New Era Trust, New China Trust, New Era Securities, Guosheng Securities, and Guosheng Futures. Prior to that, Pao Shang Bank filed for bankruptcy, and Zhongjiang Trust and Hengtai Securities were transferred. In fact, Huaxia Life was also in the transfer of the list, but the working group has not been released, to the suffering of the waiting Guizhou richest man and the listed company that paid 7 billion deposit.
But the tentacles of tomorrow’s system are too many. As the old saying goes, a bug with a hundred feet is dead but not dead.
In the process of combing the ant shareholders, I have an unexpected discovery: Beijing Capital Management Investment Center, which is part of the Bo Yu system, there is a LP is a private equity investment called Investors Siqi. The investor behind this private placement is an affiliate of tomorrow’s system.
In addition, another Shanghai background of private equity — Shanghai Financial Development Investment Fund Phase II (One), its fund manager Shanghai Jinpu has a small shareholder called Xi’an Shenghe, after penetrating the layers, also points to the affiliates of tomorrow’s system.
But the two companies and tomorrow’s affiliates, is likely to be just a too late to deal with the historical legacy of the problem, and the scale is not large, has not turned many waves. In the gray corner of the ant feast, it becomes a footnote of the end of a prosperous era.
The Tomorrow Department has receded, but its impact on China’s financial system is still there. And this kind of poisoning is bound to continue for quite a long time. The essence of the company is to “unconnectedness of related transactions”. Through the financial institutions it controls, it operates several puppets in front of the stage, promotes mergers and acquisitions in the capital market, completes the transfer of assets and speculates on the stock price to make money. It holds too many licenses, you just in this market, it is difficult to avoid it.
Previously, Jack Ma also had a lot of interactions with the Tomorrow Department. Zhao Wei and Huang Youlong, who are very close to Ma, were once the puppets of the Tomorrow Group. Zhao Wei and his wife once participated in the shell listing of Ali Pictures and made a lot of money. In addition, Huang Youlong and Jack Ma are also shareholders of Yunfeng Financial.
Zion Insurance, in which Ali has a stake, is famous for its “three horses in the same tank”, in which Jack Ma, Ma Huateng and Ma Mingzhe are involved, and the company’s controller is the well-known capital crocodile Eurasian Ping. The smallest founding shareholder of Zion Insurance, Qingdao Huilijun Trading Co.
The company’s founder and CEO, Mr. Ma Yun’s close associate, Mr. Yu Feng, was involved in a private equity fund called Phoenix Fortune, which was managed by a young man named Du Li, who is the latest mystery player to emerge in the mainland capital market and has taken control of a number of listed companies in a short period of time, including Dayilong and Guosheng Financial Holdings. This Du Li is also a disciple of the Tomorrow Department.
It’s easy to change a company, but it’s hard to change a model. Especially in a market that is still incomplete, this model has a strong room to perform in terms of brutal profit-making. As the richest man in the world, Jack Ma is at a prosperous intersection of capital, and there are many things he can’t avoid even if he wants to.
strange circle
I’m reminded of some dusty stories about Ali Health (0241.HK).
Seven years ago, Ali and Jingdong fought over China’s first third-party online drug trading license. At that time, the volume of online drug transactions had exceeded 400 million, but the drug regulator was very cautious about the sector. If poorly regulated, it could lead to rampant counterfeit drugs and endanger people’s health. With the continued deepening of medical reform and the rapid increase in the scale of online drug sales, the mouth of regulation has only loosened in the face of irreversible trends.
By the end of 2013, however, the first pilot license was issued to a little-known pharmaceutical company in Hebei – Hebei Huiyue Pharmaceutical Technology Co. Jack Ma and Liu Qiangdong, who learned the news at the time, were dumbfounded and quickly called in to investigate the company’s background.
The company’s legal representative called Chen Wenxin, is not a well-known figure in the field of medicine, his main focus is to operate a golf driving range in Shenzhen. The medical platform run by this company was closely linked to a Hong Kong listed company, CITIC 21 Century. Chen Wenxin is the younger brother of Chen Xiaoying, who was a major shareholder of CITIC 21 at the time. Although CITIC 21 was backed by CITIC’s strong background, the business was small and its market capitalization was low at the time.
In the end, Jack Ma was one step ahead of the others, and he acquired a majority stake in the majority shareholder for just HK$1 billion, taking control of the listed company, which was renamed today’s Ali Health.
But it was only after Ma’s acquisition that he discovered that the Hebei-based company was not actually a listed company. Ma re-signed an agreement with this Chen Wenxin to include that Hebei company, which held a license, as a listed company. But this was a clear violation of the HKEx’s Takeover Code. What the HKSE cares most about is whether your acquisition is fair and equal to all shareholders. Ali’s acquisition of assets held by relatives of a major shareholder was clearly not fair to other minority shareholders. In the end, the Hong Kong Securities and Futures Commission notified and punished the deal.
But Ali’s response is also interesting. After the Ali acquisition, the listed company’s share price rose fivefold, and “no shareholder was unfairly affected”.
The deal, which happened just before Alibaba’s US IPO. Its significance was magnified. It was seen as a gesture of goodwill from Jack Ma to certain families with deep pockets, which has brought Ali into question in the international capital markets. But Ali’s associates kept emphasizing that it was a perfectly normal business move.
That’s probably true. In China, there are many areas that cannot be avoided. If that Hebei company didn’t hold such a scarce license, Jack Ma probably wouldn’t have the slightest interest in that listed company.
Since Ali’s ownership, Ali Health’s share price has skyrocketed 40 times, growing from a penny stock to a leading medical and health stock with a market capitalization of $270 billion. Chen Xiaoying, who was the major shareholder back then, didn’t actually quit completely, she still holds 5.78% of Ali Health, and the market value of this stake is now up to 15 billion.
1 billion and 15 billion, you say, what is the real “show of goodwill”?
From this point of view, to look at the early ant chased by the capital of the frenzied exuberance, will have a better understanding.
With a huge user base of more than 700 million Ali and ants, they have a strong aggressiveness and growth in any field they get involved in, and the capital likes this the most, which means a strong profit margin. The various capitals that want a piece of the ant pie, of which there are many, probably won’t give Ma a chance to deny them.
This time around, Ant is in a completely different situation than Ali was six years ago. That time, Ma Yun needs to account for the early investment in his own Softbank and Yahoo. This time, however, the landing of A and H shares has little to do with the powerful foreign shareholders anymore, it’s a party that belongs entirely to Ma and his friends, and it’s easier, too, to hand out money to those who support them.
This oriental carnival party is particularly eye-catching at a time when the world has just gone through a pandemic and the global economy is in a state of malaise.
“Ants,” a very special imagery. It’s massive, like the huge population base behind a product. It’s solidarity, a colony with a clear division of labor, can build a large and sophisticated underground project in a short time. It is industrious and busy, but very often, not for itself, but for the few in the group that it is responsible for supplying. It is extremely lowly, and compared to other species, the ant is a two-dimensional creature: what do you care if it destroys you?
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