Jiang Zhicheng, the grandson of former Chinese Communist Party leader Jiang Zemin, and others are secret investors in AntGroup.
According to overseas media reports, after a lengthy investigation into the shareholding structure of AntGroup (Ant), founded by Jack Ma, the Chinese Communist regime discovered that Jiang Zhicheng, the grandson of former CCP leader Jiang Zemin, and Li Botan, the son-in-law of Jia Qinglin, a former member of the Standing Committee of the CCP’s Politburo, were secret investors in AntGroup. This result contributed to the withdrawal of Ant’s application for listing in both Shanghai and Hong Kong by Communist Party leader Xi Jinping himself.
Overseas journalists came to the above conclusion after interviewing more than 12 CCP officials and government advisors. The newspaper said that the CPC had started investigating Ant’s shareholding structure as early as Oct. 24 last year, before Jack Ma publicly criticized China’s tightening of financial sector regulations. It is worth noting that Pan Gongsheng, vice governor of the People’s Bank of China, spoke in Beijing on the same day, saying that “individual non-financial enterprises have blindly expanded into the financial sector, with complex shareholding structures and organizational structures, and even cross-shareholdings, false capital injections, and huge sums of money”. The source working in the People’s Bank of China said that Pan Gongsheng was criticizing the Ant Group.
The report disclosed that many of the investors in Ant are the “second generation of the Reds”, with Jiang Zhicheng, the grandson of Jiang Zemin, being the most visible. Jiang Zhicheng is the son of Jiang Zemin’s eldest son Jiang Mianheng, foreign name Alvin, graduated from Harvard University and founded the private equity fund BoyuCapital in Hong Kong. He is a close friend of Jack Ma’s, and his Boyu Capital, together with China Investment Corporation, China Development Bank and CITIC Group, formed a consortium in 2012 to raise 7.1 billion yuan (USD) to help buy back the shares of Alibaba, which were still held by Yahoo at the Time. After the consortium bought about 5% of Alibaba’s shares, Alibaba went public in the U.S. two years later, and the consortium made a huge profit.
Boyu Capital also had a stake in Ant, but in a very roundabout way. Because China restricts foreign companies from investing in payment businesses, Boyu Capital, a Hong Kong company, first set up a subsidiary in Shanghai called Boyu Guangqu Taoran (Shanghai) Investment Management Partnership, which invested in a company called ShanghaiTiancen investmentManagement. The subsidiary invested in a company called ShanghaiTiancen investmentManagement, which in turn invested in a private equity fund, Beijing Jingguan Investment Center (hereinafter referred to as Beijing Jingguan), which came out to invest in Ant.
Ant had a capital raising round in 2016, raising 4.5 billion yuan from 16 investors, of which Beijing Capital Management was one. Ant raised a further RMB 21.8 billion in 2018, in which BJM also invested. In the end, BJM held nearly 1% of Ant’s equity, making it one of the top 10 investors in Ant; in Ant’s prospectus, only BJM’s name was seen, but there was no mention of Boyu Capital or Jiang Zhicheng. Jiang Zhicheng did not respond to media inquiries.
Another secret Ant investor, Jia Qinglin’s son-in-law Li Botan, set up Beijing Zhaode InvestmentGroup in Beijing. The report said Zhaode invested in three companies, Tibet Hongde Century Investment Co, Fu Qing QiSheng III Investment and Shanghai Zhongfu Equity InvestmentManagement Center, through multiple layers. The report said that Zhaodu invested in three companies through multiple layers, namely Tibet Hongde Century Investment Co, Fu Qing QiSheng III Investment and Shanghai Zhongfu Equity Investment Management Center.
The report also revealed that many of Ma’s friends had hidden their identities and invested in Ant through third-party funds, including Lu Zhiqiang, chairman and president of China’s Pan Ocean Holdings Group, Shi Yuzhu, chairman of Giant Network, and Guo Guangchang, chairman of Fosun Group. In addition, some people invest indirectly through relatives, such as Xiao Feng, vice chairman of Wanxiang Holdings Ltd, who is invested by his wife, Huang Rongping, in “Chi-Pay (Shanghai) Investment Center”, which in turn invests in Ant.
The report said that Ma had China Pension Fund and China Investment Corporation invest in Ant in order to make it go public; as a result, Ant was approved by several regulators to go public in just one month last summer, but the listing plan was eventually halted by Xi Jinping.
Sources who provided the Wall Street Journal with insider information said Xi was not concerned about Ant’s IPO as a way to funnel benefits to prominent “rich kids”; he was concerned that China’s “rich kids” were making huge profits from Ant’s IPO, widening the gap between the rich and the poor and undermining his measures to combat poverty. He is concerned about the fact that China’s “rich generation” is making huge profits through the listing of Ant, widening the gap between the rich and the poor and weakening its measures to eliminate poverty.
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