Opinions are divided over the emergency halt of Ant Group by Chinese regulatory authorities on the eve of its IPO. The Wall Street Journal broke the news that it was China’s President Xi Jinping who called for a halt to the ant IPO because the public comments of Jack Ma, the de facto controller of the ants and China’s richest man, had angered senior government officials. Some commentators believe that this incident has indeed dealt a serious blow to the confidence of private entrepreneurs.
Ant founder Jack Ma said at a forum last month that there was no systemic risk in China’s finance because there was no system, and criticized regulation for hindering innovation, with the media linking the incident to the ant’s suspended listing.
The Wall Street Journal on Thursday cited a source as saying that the dramatic development in the ant IPO was related to Ma’s public remarks that angered top government officials, and that Xi Jinping ordered Chinese regulators to investigate and block the ant listing after learning of Ma’s comments through a government report.
The report doesn’t further explain what Xi’s personal motivations were, but it does note that some senior Chinese officials have said that Xi doesn’t care whether people get rich from this, but rather what they do after they get rich and whether their interests are aligned with those of the country.
While the Wall Street Journal’s report is unconfirmed, Hong Kong current affairs commentator Thorpe found it quite credible.
Thorpe: “How could Xi Jinping not care about people getting rich? Because it is possible to do many things after getting rich, and it is possible to not keep in line with the Party’s interests, and if Ant Group goes public, Jack Ma could become the 11th richest person in the world, and also the largest IPO (Initial Public Offering) in the history of global capital, and most importantly, Jack Ma’s words were directed at the Party’s interests. Because the words he spoke were saying ‘the party did wrong’.”
The event was enough to shatter the illusions of China’s rich and powerful
According to Samp, getting rich is fundamentally contrary to the nature and beliefs of the CCP.
He also said that the government’s decision to use a “white glove” for the purpose of promoting the development of the country’s economy was a step in the right direction. ‘You can get a lot of money, and these military party enterprises may have some degree of representation, which is not acceptable to the Chinese Communist Party.”‘
He believes the event will be enough to shatter the illusions of China’s wealthy.
Samp: “The first thing that will frighten those like Jack Ma, Ma Huateng of Tencent and other bosses will have a chilling effect, socialist communism is about bringing down the bourgeoisie. The rich are not targeted by the Communist Party? It’s incredible.” .
Since the suspension of Ant Group’s IPO, China has released a number of consultation papers on regulating the conduct of Internet businesses, including moves to crack down on monopolistic practices on online platforms. It has led to speculation as to whether the authorities are no longer targeting Jack Ma alone.
Hong Kong economic analyst Luo Jiacong speculated that there may be an inside story to the halt of the ant on the eve of its IPO.
Luo Jiacong: “The Chinese Communist Party’s consistent approach is to ‘teach children behind closed doors’, and now deliberately make things worse, it seems that the distribution of benefits can not be negotiated, before the firefight across the air, the so-called anger at the top seems to be the cause, not the effect.”
He believes the future of Ant Group’s IPO will depend on the distribution of benefits.
Luo Jiacong: “Unless the government tacitly endorses it, or even strongly supports it, there is no monopoly, or in our words, ‘collusion between government and business’. It’s only natural that the government should take a share of the pie when you use this special status to raise funds. The question is how to distribute it in a reasonable way?”
There has been no response to the Wall Street Journal’s report from the ants or even China’s State Council General Office so far.
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