Recently, it was reported that Xi Jinping, who personally called off the listing of Ant Group, demanded a thorough investigation of the political forces behind Ant and Ma.
The purge of Ma, who has a Jiang faction background, signals another round of infighting between Xi Jinping and Jiang Zemin’s group. Recently, there is news that Xi Jinping, who personally called off the listing of Ant Group, has asked for a thorough investigation of the political forces behind Ma Yun, and the Ant Group, which is shrouded in shadow, has seen its valuation plummet by $150 billion.
Ant Group becomes “big gold control” Alibaba out of the game
Ant Group’s valuation once approached $300 billion. But the Wall Street Journal reported on May 4, the U.S. mutual fund giant Fidelity Investments (Fidelity Investments), in February this year to make adjustments to Ant’s valuation, that Ant only $ 144 billion, nearly half of the valuation in August last year.
In other words, since Jack Ma and his Ant Group were purged, Ant valuation fell wildly by more than $150 billion.
Last month, Ant was forced to undergo a revamp and become a financial holding company, with all its operations coming under full official supervision. Analysts believe this will discount Ant’s attractiveness to investors, and that Ant Group’s valuation will continue to be revised downward.
Ant Group logo.
Dong Ximiao, chief researcher at the Zhongguancun Institute of Internet Finance, believes that the rectification program is more stringent than previously expected, and Ant is expected to need at least 200 billion yuan of registered capital under the “big financial control” to meet the capital adequacy requirements.
Sun Haibo, president of the Institute of Financial Supervision of Think Tank, said that Ant needs to replenish its huge capital in order to complete the rectification, and even if Ant is listed again, the valuation will be significantly reduced, and the era of Alibaba leading the way is over.
Alibaba was recently heavily fined 18.2 billion (RMB) by the authorities, and it is expected that Alibaba will keep a low profile from now on.
The purge of Jack Ma involves Jiang Zemin’s family
The fate of Ant Group, founded by Jack Ma, took a major turn before it went public in November last year. Beijing authorities abruptly halted Ant’s IPO plans, which resulted in a reorganization of the group and an anti-monopoly investigation of Alibaba.
Many believe that Jack Ma’s critical remarks to the Chinese Communist Party regulators at the Shanghai Financial Summit last October angered the top brass of the Communist Party and triggered the uproar. Ma was subsequently interviewed by four major regulators.
But sources close to the matter revealed that the political power behind Ma and Ant Group, which has upset Xi Jinping, was the main reason that prompted Xi himself to call off Ant Group’s IPO.
The Wall Street Journal on April 27 cited sources familiar with the matter as saying that Xi had asked for a thorough investigation of the political forces behind Ant Group’s fast-tracked IPO and “a review of Ma’s ties to these state stalwarts.”
The top Communist Party leader is concerned that those expected to benefit from the world’s largest IPO include a number of well-connected individuals and institutions, some influential powerful Communist Party families, and large state-owned funds.
Jack Ma at a conference in Paris on May 16, 2019.
Ma will not be allowed to leave China until Ant Financial completes the business reforms required by regulators and the government’s investigation is over, people familiar with the matter said. That means uncertainty will continue to hang over the future of Ant Group and Jack Ma.
On Feb. 16, Hua Ri disclosed that a few weeks before Ant Group’s public listing, the Communist Party’s financial regulator found that Ant’s complex shareholding structure, which involves political interests of Jiang Zemin’s faction of the “Shanghai Gang,” poses a potential challenge to Xi Jinping.
According to the report, Boyu Capital, founded by Jiang Zemin’s grandson Jiang Zhicheng, and Beijing Zhaodu Real Estate Company, owned by Li Baodan, the son-in-law of former member of the Communist Party’s Politburo Standing Committee, hold shares in Ant Group in an opaque manner.
In fact, Jack Ma’s Alibaba had an interest in Jiang’s capital years ago, and it was Jiang Zhicheng who helped Ma negotiate the deal to buy Yahoo’s half of Alibaba’s shares in 2012.
Jiang Zhicheng’s Boyu Capital, as well as the private equity arms of state-owned China Investment Corporation, China Development Bank and CITIC Group, formed a consortium of investors that provided some of the $7.1 billion needed. Wang Jun, son of Red II Wang Zhen, He Jinlei, son of He Guoqiang, and Liu Lefei, son of Liu Yunshan, were involved.
In 2014, Alibaba listed on the New York Stock Exchange and these powerful capitals made a fortune. Jiang Zhicheng’s Boyu Capital’s $400 million investment in Alibaba yielded a return of more than $1 billion.
UBS once did a statistic, in 11 years, Yahoo investment in Alibaba’s asset returns, each year rose by 55%, a geometric growth. These red two generations of course also profited a lot.
Ant Group also benefited from the addition of these powerful investors, and Ant’s application to go public, was approved within a month. According to the business records seen by Hwa Ri, Beijing Jingguan Investment Center, run by Jiang Zhicheng’s Boyu Capital, acquired nearly 1% of Ant’s shares through two investments, placing it among the top 10 shareholders.
Zhongnanhai vs. Jack Ma
Experts believe that Jack Ma and the Jiang political forces behind him have poked Xi Jinping in the windpipe, so to speak. Since the stock market turmoil in 2015, systemic financial risks have become a heartache for Xi Jinping, and his battle with Jiang’s faction in the financial sector is escalating.
Wang Jian, a veteran media source, analyzed that the listing of Ant Group was “called off” by the authorities, meaning that the power struggle between Xi and Jiang began to take the stage, with both sides going bare-knuckled in a duel to the death.
A Feb. 22 report in the Wall Street Journal revealed inside information about the transfer of assets by Jiang Zemin’s grandson Jiang Zhicheng, releasing an extraordinary signal.
The Wall Street Journal revealed on Feb. 22 that Boyu Capital, controlled by Jiang Zemin’s grandson Jiang Zhicheng, has been moving to Singapore since 2019. (New Era composite photo)
The newspaper reported that Boyu Capital, founded by Jiang Zhicheng, had set up an office in Singapore and began transferring assets from Hong Kong to Singapore from the end of 2019. At the time, Xi was trying to weaken Jiang’s influence in Hong Kong and strengthen his control over the city.
A source familiar with the matter said the main reason for moving Boyu Capital to Singapore was concern that the 95-year-old’s influence would diminish and his family and allies would be purged.
In addition, according to Caixin, after Xi Jinping took power, the first stage was to take back the power, and the second stage was to take back the money bag, which made Jiang’s princeling party feel a deep sense of crisis. A director of the Chinese Communist Party’s official media said that Jiang’s princelings believe that next year will be the 20th Communist Party Congress, and if they do not resist, they fear that they will have no chance to turn around.
The report quoted a person familiar with the inside story in Beijing as revealing that the rectification of Ant Group and Jack Ma has become the outpost of the 20th Communist Party Congress, and the princelings are worried about the money and power being seized by Xi Jinping, so they are supporting Jack Ma behind the scenes. This time the Zhongnanhai battle Jack Ma (Jack Ma’s English name), I am afraid that the good show is still ahead.
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