The Wall Street Journal reported on Tuesday (16) that the Chinese Communist regime has been investigating the owners behind Ant Group for a long Time, and found that the “second generation of the Reds”, including Jiang Zhicheng, the grandson of former Chinese leader Jiang Zemin, and Li Botan, the son-in-law of Jia Qinglin, a former member of the Standing Committee of the Communist Party’s Politburo, have secretly invested in Ant Group. According to the report, Xi Jinping, the general secretary of the Communist Party of China, cancelled the listing of Ant Group in Shanghai and Hong Kong at the last minute, which may be related to the power struggle in the Communist Party of China; the listing of Ant Group is the world’s largest fund-raising event, and Xi Jinping is allegedly worried that the “Shanghai gang” will profit from it and become bigger.
The Wall Street Journal claims to have interviewed more than 12 senior Communist Party officials and government advisors, saying that the Central Committee had begun investigating Ant’s shareholding structure as early as October 24 of last year, before Jack Ma‘s high-profile criticism of the Communist Party’s financial regulatory system. According to the report, Pan Gongsheng, deputy governor of China’s central bank, made a statement 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 report quoted informed sources at the central bank as saying that although Pan Gongsheng did not name the company, he was referring to Ant Group.
The report also said that many of Ant’s shareholders are “second generation Reds”, including Jiang Zemin’s grandson Jiang Zhicheng. Jiang Zhicheng, whose foreign name is Alvin, founded Boyu Capital, a private equity fund in Hong Kong, after graduating from Harvard University. The report also said that Jiang Zhicheng and Jack Ma good friends, his Boyu Capital in 2012 with China Investment Corporation, China Development Bank and CITIC Group to form a consortium to raise $ 7.1 billion to provide funds for Jack Ma to buy back the shares of Alibaba, which was still held by Yahoo (Yahoo). The consortium bought about 5% of Alibaba’s shares after it went public in the United States two years later, and the consortium made a huge profit.
The report said that Boyu Capital also took a roundabout way to buy a stake in Ant. As “overseas companies” including Hong Kong companies are not allowed to invest in payment business, Boyu Capital, as a “Hong Kong company”, first set up “Boyu Guangqu Taoran (Shanghai) Investment Management Partnership” subsidiary in Shanghai. “The subsidiary invested in a company called Shanghai Tiancen investment Management, which then invested in a private equity fund, Beijing Jingguan Investment Center (hereinafter referred to as Beijing Jingguan), which invested in Ant Group.
Ant Group tried a capital raise in 2016, raising $4.5 billion from 16 investors, of which Beijing Capital Management was one. Ant raised another RMB 21.8 billion in 2018, with BJM also participating. In the prospectus of Ant, only the name of BJM was mentioned, and the relationship between Boyu Capital or Jiang Zhicheng and Ant Group was not disclosed.
Jiang Zhicheng did not reply to media inquiries.
Jia Qinglin’s son-in-law Li Botan is also one of the mysterious shareholders of Ant Group. Li is the founder of Beijing Zhaode Investment Group in Beijing. According to reports, Zhaode also invested in Tibet Hongde Century Investment Co through a roundabout method, which in turn invested in Fu Qing Qi Sheng III Investment, which then took a stake in Shanghai Zhongfu Equity (Shanghai Zhongfu Equity). (Shanghai Zhongfu Equity Investment Management Center), and finally by Zhongfu Investment, which invested in Ant Group.
Reports also indicate that many of Ma’s friends invested in Ant Group through a third-party fund in a hidden capacity. These friends include 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. For example, Xiao Feng, vice chairman of Wanxiang Holdings Co., has his wife, Huang Rongping, take a stake in the company, which in turn takes a stake in Ant Group.
According to the report, Ma invited China Pension Fund and China Investment Corporation to take a stake in Ant in order for it to go public smoothly; as a result, Ant was approved by several regulators to go public in just one month last summer, but the listing plan was stopped by Xi Jinping at the last minute.
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