Jack Ma’s business empire has suffered consecutive blows from the Chinese Communist Party.
After Alibaba Group received an astronomical fine of 18.2 billion yuan from the Chinese Communist Party, Ma’s Ant Group was interviewed again by four financial regulators of the Chinese Communist Party on Monday, asking Ant to correct unfair competition in its payment business, disconnect Alipay from other financial products such as “Flower Chant” and “Debit Chant Ant was asked to correct its payment business, disconnect Alipay from other financial products such as “flower chant” and “borrowing chant”, and take the initiative to suppress the balance of Alipay.
On April 12, four financial authorities, including the Communist Party’s Central Bank, the CBRC, the SFC, and the Foreign Exchange Bureau, jointly interviewed Ant Group again.
Pan Gongsheng, deputy governor of the Central Bank of China, said that the rectification plan requires Ant to apply for the establishment of a financial holding company as a whole, and all institutions engaged in financial activities will be incorporated into the financial holding company to be supervised; it also requires Ant to break the monopoly of information, to operate personal credit business with a license according to the law, to follow the principles of legality, minimum and necessity to collect and use personal information, and to protect personal and national information security.
Pan Gongsheng also said that Ant should strictly implement prudential supervision requirements, seriously rectify irregular credit, insurance, wealth management and other financial activities, control high leverage and risk contagion, but also required to control the liquidity risk of important fund products, the initiative to suppress the balance of the balance.
At the end of last year, the Communist Party of China’s central bank and other financial authorities interviewed Ant Group, saying that Ant had flouted regulatory compliance requirements, there were violations of regulatory arbitrage, and put forward five key business areas to rectify the requirements.
Wang Jian, a well-known overseas observer of Chinese politics and economics, said in a live program on April 16 that Ma’s business empire has suffered successive crackdowns from the CCP, showing that Ma’s troubles are far from over.
According to Wang Jian, the CCP’s ongoing crackdown on Alibaba and Ant Group seems to be reminding investors to stand away from Jack Ma.
After Alibaba was heavily fined, the market believes that the CCP’s fix on Ma and Alibaba has come to an end, and investors are interpreting it as a positive short, which has caused Alibaba’s shares in Hong Kong to soar wildly, closing up 6.51 percent at HK$232.2 on Monday.
Wang Jian pointed out that investors’ bearish out-of-competition interpretation may be a failure to understand the intentions of the Chinese Communist Party (CCP), which has continuously cracked down on Ma to release signals that the CCP just wants to crack down on Ma, indicating that Ma still has something in his hands that the CCP wants, but Ma has not yet handed over.
Last November, Ant Group’s plan to go public was urgently called off by CCP regulators, sparking much speculation in the market.
According to the Wall Street Journal, the Chinese government investigated Ant’s shareholding structure and found that Jiang Zhicheng, the grandson of former President Jiang Zemin, and Li Botan, the son-in-law of Jia Qinglin, a former member of the Communist Party’s Politburo Standing Committee known as the “Shanghai Gang of the Jiang Faction,” were among the “Jiang Faction” figures. Other “second generation Reds” are secret investors of Ant.
According to the report, Jiang Zhicheng has a close relationship with Alibaba Group founder Jack Ma, and the former invested in Ant through a private equity fund of Beijing Jingguan Investment Center.
It is reported that Ant raised $4.5 billion and $21.8 billion in 2016 and 2018, respectively, with the participation of Beijing Capital Management, which eventually held nearly 1 percent of Ant’s equity and became Ant’s top 10 investors, but in Ant’s However, the relationship between Boyu and BJM was not disclosed in Ant’s prospectus.
Another secret investor in Ant is Jia Qinglin’s son-in-law Li Botan, who is the controller of Beijing Zhaode Investment Group. Zhaode also used Boyu’s method to invest in Ant through a multi-layered holding, ending with Shanghai Zhaode Equity Investment Management Center in charge.
If Ant had gone public last year, Ma and the top executives of Ant, as well as the “second generation of Reds”, would have reportedly received billions of dollars in revenue. In addition, many of the potential beneficiaries are the “Shanghai Gang” and “Crown Prince Gang,” political enemies that Xi Jinping, the general secretary of the CCP, has deliberately suppressed.
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