| From: Glenn Petersen | 12/27/2020 12:20:45 PM | | | | | | China orders Ant Group to rectify businesses
PUBLISHED SUN, DEC 27 202011:23 AM EST
Associated Press
KEY POINTS
-- The People’s Bank of China, the country’s central bank, summoned Ant executives on Saturday and ordered them to formulate a rectification plan and an implementation timetable of its business.
--The statement said that Ant Group lacked a sound governance mechanism, defied regulatory compliance requirements and engaged in regulatory arbitrage.
-- Chinese regulators last month halted Ant’s $37 billion stock debut in Shanghai and Hong Kong over regulatory changes.
Chinese regulators have ordered Ant Group, the world’s largest financial technology company, to rectify its businesses and comply with regulatory requirements amid increased scrutiny of anti-monopoly practices in the country’s internet sector.
The People’s Bank of China, the country’s central bank, summoned Ant executives on Saturday and ordered them to formulate a rectification plan and an implementation timetable of its business, including its credit, insurance and wealth management services, the regulators said in a statement Sunday.
The statement said that Ant Group lacked a sound governance mechanism, defied regulatory compliance requirements and engaged in regulatory arbitrage. It also said that the company used its market position to exclude rivals and hurt the rights and interests of consumers.
The meeting came after Chinese regulators last month halted Ant’s $37 billion stock debut in Shanghai and Hong Kong over regulatory changes, and comes just days after China announced an anti-monopoly investigation of e-commerce giant Alibaba Group, which owns a 33% stake in Ant Group.
The orders from regulators could limit Ant Group’s expansion and throw its lucrative finance businesses into disarray.
Ant Group, which started out as a payments services for Alibaba’s e-commerce platform Taobao, has since expanded to offer insurance and investment products to its hundreds of millions of users in mainland China. Jack Ma, the founder of both Alibaba and Ant Group, is one of China’s richest and most prominent entrepreneurs.
Regulators ordered Ant Group to establish a financial holding company and hold sufficient capital. They also said that Ant Group should return to its payments origins, enhance transparency around transactions and prohibit unfair competition, while improving corporate governance and ensuring that it complies with regulatory requirements for its businesses.
Ant Group said in a statement Sunday that it would comply with regulatory requirements and enhance risk management and control, and that a working group would be set up to make the necessary rectifications.
“We appreciate financial regulators’ guidance and help,” the statement said. “The rectification is an opportunity for Ant Group to strengthen the foundation for our business to grow with full compliance, and to continue focusing on innovating for social good and serving small businesses.”
The scrutiny of Ant Group and Alibaba comes as China closely examines the influence of the country’s internet sector.
Last month, China released draft regulations to clamp down on anti-competitive practices in the industry, such as signing exclusive agreements with merchants and the use of subsidies to squeeze out competitors.
Alibaba and a company spun off by Tencent Holding Ltd. were fined this month for failing to apply for official approval before proceeding with some acquisitions.
Last Tuesday, regulators met with executives of Alibaba and five other major Chinese internet companies and warned them not to abuse their dominance to drive out competitors through use of exclusive contracts, predatory pricing and other tactics, according to a statement by the State Administration of Market Regulation.
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| To: Glenn Petersen who wrote (739) | 12/27/2020 3:26:57 PM | | From: Julius Wong | | | | How The Chinese Use Illegal Online Gambling And Tether To Launder Over $1 Trillion Yuan
Last month, another gig job platform backed by Ant Group, China’s dominant online payment service provider, was investigated for suspected money laundering activities. Beijing Bujiao Technology Co. Ltd. was suspected of having falsely issued more than 1.3 billion yuan of value-added tax invoices. Some of the company’s money laundering activities involved cross-border gambling, Caixin learned.
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| From: Glenn Petersen | 1/4/2021 8:26:51 AM | | | | | | Where is Jack Ma? Alibaba's billionaire founder is reportedly missing following China's crackdowns on his companies
Katie Warren
Business Insider
January 4, 2020
-- Chinese billionaire Jack Ma is suspected missing, Jessica Yun reported for Yahoo Finance.
-- Per the report, the Alibaba and Ant Group founder has not been seen publicly in more than two months and he was abruptly replaced as a judge on the African talent show he founded.
-- Chinese regulators have been cracking down on Ma's business empire in recent months, halting Ant Group's IPO in November and launching an antitrust investigation into Alibaba in 1December.
-- The clampdowns came after Ma publicly criticized China's banking rules in October.
-- Ma, who has a net worth of $50.6 billion, was China's richest man until recently. Visit
Chinese billionaire Jack Ma, the founder of Alibaba and Ant Group, is suspected missing, Jessica Yun reported for Yahoo Finance.
The 56-year-old businessman has not been seen in public for more than two months, per the report.
Ma has been in the spotlight recently as China has cracked down on his business empire. In late December, Chinese regulators launched an antitrust investigation into Alibaba, the country's biggest e-commerce company that some refer to as "the Amazon of China." And in November, China had introduced a series of new regulations that put a halt to what would have been the massive initial public offering of Ma's fintech company, Ant Group.
The new rules came weeks after Ma criticized China's financial regulatory system at a conference in Shanghai in October. At the conference, Ma reportedly dismissed the global financial regulations used by China as "an old people's club" and said, "We can't use yesterday's methods to regulate the future."
Blair Silverberg, CEO of debt-financing startup Capital told Business Insider's Katie Canales in November that the new regulations were introduced " so the government can assert its supremacy over Jack Ma."
In November, Ma was replaced as a judge on the African talent show he founded, "Africa's Business Heroes," the Financial Times reported. The talent show did not immediately respond to Business Insider's request for comment, but an Alibaba spokesperson told Business that Ma could no longer be on the judging panel for the show's finale — which was filmed in November but has not yet been released — "due to a scheduling conflict."
"We do not have anything to add beyond that," the spokesperson said in response to questions about Ma's whereabouts.
Ma stepped down as chairman of Alibaba in 2019.
Until recently, Ma was China's richest man with a fortune that reached more than $60 billion. Ma's net worth has however taken a $12 billion hit over the past two months as China has tightened rules for the financial technology industry. Today, Ma is worth $50.6 billion, making him the fourth-richest person in China, according to the Bloomberg Billionaires Index.
As news of Ma's suspected disappearance has spread, an August 2019 prediction about Ma by another billionaire Chinese businessman has been recirculating on social media.
In the video interview, Guo Wengui, who fled China as a fugitive in 2014 and claims to be a whistleblower exposing corruption in the country, said that in the next year, Ma would likely end up in jail or dead because China wants to "take back" Ma's lucrative Ant Group.
Last week, the Chinese government ordered Ant Group, which owns China's largest digital payment platform Alipay, to scale back its operations after expressing concerns that its corporate governance was "not sound."
A spokesperson for Ant Group did not immediately respond to Business Insider's request for comment for this story.
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| From: Glenn Petersen | 1/7/2021 7:34:51 AM | | | | | | Alibaba and Tencent shares fall after report says they could be added to U.S. blacklist
PUBLISHED THU, JAN 7 20216:45 AM EST
Sam Shead @SAM_L_SHEAD
CNBC.com
KEY POINTS
-- The shares of Alibaba and Tencent saw heavy falls after a report, citing several people familiar with the matter, suggested the Trump administration could be about to add the Chinese tech giants to a U.S. blacklist.
-- The conglomerates saw their shares on the Hong Kong stock exchange slide by around 4% after the report from The Wall Street Journal said that officials were considering prohibiting Americans from investing in the firms.
-- If they do get added to the U.S. blacklist, then American investors won’t be able to trade their stocks from Jan. 11.
The shares of Alibaba and Tencent saw heavy falls on Thursday after a report, citing several people familiar with the matter, suggested the Trump administration could be about to add the Chinese tech giants to a U.S. blacklist.
The conglomerates saw their shares on the Hong Kong stock exchange slide by around 4% after the report from The Wall Street Journal said that officials were considering prohibiting Americans from investing in the firms.
The U.S. government blacklisted 31 Chinese companies in November over concerns that they support Beijing’s military through an executive order. U.S. state and defense officials have been discussing expanding the executive order so the blacklist includes more companies, according to anonymous sources cited by the WSJ.
When the Hong Kong stock exchange closed, Tencent’s share price was down 4.69% to 568.5 Hong Kong dollars, while Alibaba’s share price was down 3.91% to 221 Hong Kong dollars.
If they do get added to the U.S. blacklist, then American investors won’t be able to trade their stocks from Jan. 11. Those that already own shares in the companies would have until November to offload them.
Trump signed the initial executive order shortly after losing the 2020 presidential election to Joe Biden and it is already having consequences. The New York Stock Exchange confirmed on Wednesday that it plans to delist China Mobile, China Telecom and China Unicom.
On Tuesday, the Trump administration moved to ban Chinese payments apps including Alipay and WeChat Pay, which are linked to Alibaba and Tencent respectively.
In December, the U.S. added Chinese drone company DJI and Semiconductor Manufacturing International to a trade blacklist. The U.S. Commerce Department said the action against SMIC “stems from China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex.”
Alibaba’s battles extend beyond the U.S. and to its home turf, where Chinese regulators have recently launched an antitrust investigation against the company.
Jack Ma, Alibaba’s founder and CEO, is keeping a low profile and hasn’t been seen in public since last October after he appeared to criticize the country’s regulators.
Alibaba and Tencent did not immediately respond to CNBC’s request for comment.
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| From: Glenn Petersen | 1/20/2021 7:50:22 AM | | | | | | Alibaba founder Jack Ma appears for the first time since crackdown on his tech empire
PUBLISHED TUE, JAN 19 202111:58 PM EST
UPDATED WED, JAN 20 20211:46 AM EST
Arjun Kharpal
CNBC.com
KEY POINTS
-- Alibaba’s Hong Kong-listed stock was up 5% on news of his reappearance.
-- In a video posted on Chinese social media, Ma addressed rural teachers as part of one his charity foundation’s initiatives.
-- In October, Ma made some comments that appeared critical of China’s financial regulator leading to the IPO of Ant Group being pulled. Since then, he had been laying low, a source told CNBC.
GUANGZHOU, China — Alibaba founder Jack Ma has emerged after weeks out of the spotlight, which sparked speculation about his whereabouts as his companies face increased regulatory scrutiny.
Alibaba’s Hong Kong-listed stock was up over 8% on news of his reappearance.
In a video posted on Chinese social media, Ma addressed rural teachers as part of one his charity foundation’s initiatives. The annual event, which is usually hosted in the resort city of Sanya, sees the Jack Ma Foundation celebrate the achievements of rural teachers who are awarded cash support.
“Jack Ma participated in the online ceremony of the annual Rural Teacher Initiative
event on January 20,” a spokesperson for the Jack Ma Foundation said.
In October , Ma made some comments that appeared critical of China’s financial regulator.
It was one of the reasons attributed to Chinese regulators pulling the plug on what would have been a record-setting initial public offering of Ant Group, the financial technology giant Ma founded.
Since those comments, Ma had not been seen, leading to speculation he had gone missing. But a source told CNBC this month that he was just laying low.
Chinese authorities have cracked down on Ma’s technology firms Alibaba and Ant Group.
In December, China’s State Administration for Market Regulation opened an investigation into Alibaba over monopolistic practices. Beijing is also finalizing details of a wide-sweeping anti-monopoly law.
Regulators also asked Ant Group to rectify its business and comply with regulatory requirements. China is pushing through new rules on so-called microlending, which included provisions such as capital requirements for technology firms offering loans.
Beijing is concerned about the power of its tech companies that have managed to grow, largely unencumbered, over the past few years and have become key parts of everyday life in China.
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| To: TimF who wrote (745) | 2/12/2021 8:39:52 PM | | From: Glenn Petersen | | | | Jack Ma Spotted Playing Golf in Eastern China, Quelling Fears He Was Detained
BY BLOOMBERG
Time
FEBRUARY 11, 2021 4:01 AM EST
For months, speculation over Jack Ma’s whereabouts has run rampant. Maybe the embattled billionaire had fled to Singapore, some posited. Or he had been placed under house arrest. Or worse yet, he was locked up in a high-security jail.
As it turns out, China’s most talked-about tycoon has been working on his golf game.
The co-founder of Ant Group and Alibaba Group Holding teed off in recent weeks at the Sun Valley Golf Resort, a secluded 27-hole course on the Chinese island of Hainan, people familiar with the matter said, asking not to be identified discussing private information. Located near the island’s southern tip, the course offers expansive greens and stunning views.
It’s the first known Ma sighting since the former English teacher joined a live-streamed video chat with rural educators on Jan. 20. While that appearance helped quiet talk of Ma’s detention, speculation about his standing with China’s Communist Party has continued to swirl as authorities clamp down on his sprawling business empire.
Ma’s golf outing adds to recent evidence that the outspoken entrepreneur has — for now at least — avoided nightmare scenarios like jail time or a government seizure of his assets.
Ant, for instance, has reached an agreement with Chinese authorities on a restructuring plan that could be officially announced as soon as this week, Bloomberg reported on Feb. 3, citing people familiar with the matter. The deal is a first step on what could be a long path back to a revival of the fintech behemoth’s initial public offering, which was halted by regulators in November just days before Ant was due to start trading in Shanghai and Hong Kong.
Another positive clue emerged this week from SoftBank Group Corp founder Masayoshi Son, a longtime friend of Ma’s who was among the earliest investors in Alibaba. Son said during SoftBank’s quarterly earnings presentation on Monday that he has remained in touch with Ma. While he didn’t talk about the Chinese billionaire’s whereabouts, Son said Ma likes to draw and has been sharing his sketches via chat.
Alibaba shares rose as much as 1.5% in New York on Wednesday, closing at a more than 10-week high.
Representatives for Alibaba, Ant and the Sun Valley Golf Resort declined to comment.
Before the implosion of Ant’s IPO, Ma’s appearance on a golf course would have attracted little if any attention. The 56-year-old has been steadily relinquishing day-to-day oversight of his businesses in recent years, stepping down as executive chairman of Alibaba in September 2019.
But even in semi-retirement, Ma has rarely stayed out of public view for as long as he did after his now-infamous critique of Chinese financial regulators in October. Within weeks of his speech at the Bund Summit in Shanghai, authorities scuttled Ant’s listing, called for an overhaul of the company and started an antitrust probe of Alibaba.
Ma’s extended absence during the crackdown sent China’s rumor mill into overdrive, with some observers drawing parallels to Mikhail Khodorkovsky. Once Russia’s richest man, the Yukos Oil Co. boss spent about a decade in prison on fraud and tax-evasion charges that he said were retribution for challenging the authority of Vladimir Putin.
Given the opacity of Xi Jinping’s Communist Party, it’s difficult to assess the endgame for Ma with any certainty. He was conspicuously absent from a list of Chinese tech luminaries published by state media last week, a sign his standing with the party remains diminished.
For Hao Hong, chief strategist at Bocom International in Hong Kong, the most likely explanation is that Ma is simply laying low as his companies sort through their issues with regulators. Both Alibaba and Ant have formed special teams to work with the Chinese government, which is still fine-tuning new rules for the country’s fintech and internet industries.
Ma, described as a golfing novice by one observer at the Sun Valley resort, may have ample time to work on his swing.\
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| To: Glenn Petersen who wrote (746) | 3/11/2021 11:18:15 PM | | From: Glenn Petersen | | | | China Lays Plans to Tame Tech Giant Alibaba
E-commerce company to face softer treatment than its Ant affiliate, provided it distances itself from founder Jack Ma
By Keith Zhai and Lingling Wei
Wall Street Journal
March 11, 2021 10:12 am ET
Under founder Jack Ma, Alibaba Group Holding Ltd. had regulators and local officials in its corner as it grew into a Chinese version of Amazon.com Inc. Chinese President Xi Jinping’s recent crackdown on the empire of China’s best-known entrepreneur has put an end to that.
Since late last year, Alibaba has been in Beijing’s crosshairs, along with its financial affiliate Ant Group Co. Regulators already have come down hard on Ant, which they consider a risk to the financial system, forcing it to make changes that will severely hamper its prospects.
Alibaba, though, appears destined for softer treatment. Officials familiar with Beijing’s thinking said regulators don’t want to crush a technology powerhouse popular with both Chinese households and global investors—as long as it disassociates itself from its flashy and outspoken founder and aligns itself more closely with the Communist Party.
Antitrust regulators are considering levying a record fine against Alibaba exceeding the $975 million that Qualcomm Inc. paid in 2015 over anticompetitive practices, so far the largest in China’s corporate history, according to people with knowledge of the matter.
Those people said Alibaba also will be required to end a practice that has been dubbed “er xuan yi”—literally, “choose one out of two”—under which, regulators believe, the tech giant punished certain merchants who sold goods both on Alibaba and its rival platforms, including JD.com. The precise remedies Alibaba will have to take likely will be hammered out only after a decision is announced, according to one of the people.
Alibaba founder Jack Ma retired as the company’s chairman in 2019.PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
----------------------------------
In addition, regulators are weighing whether to require Alibaba to divest itself of some assets unrelated to its main online-retailing business. Once final, measures against Alibaba will need to be approved by China’s top leadership.
Alibaba now faces a two-pronged challenge: correcting the anticompetitive behavior alleged by regulators and adhering to the government’s political agenda. The pressure reflects Chinese leadership’s assertion of statist prerogatives over the economy, which could risk dulling the innovation and competitive spirit that powered China’s growth in recent decades.
Representatives for Alibaba declined to comment. China’s top market regulator, the State Administration for Market Regulation, didn’t respond to requests for comment.
While painful, none of the measures under consideration would come close to crippling the company, whose businesses include online retail, entertainment, media and cloud computing. Unlike Ant, which regulators viewed as a disrupter and a threat to the stability of the financial system Alibaba is considered the pride of China, a showcase for technology innovation that also is vital to the nation’s economy. Some 780 million Chinese consumers, or half of the country’s population, made purchases through the company’s platforms last year.
For a company that had net income of nearly $20 billion in its most recent fiscal year, a fine would allow it to throw money at a problem and move on. Some Alibaba executives said even a huge fine would be at least a provisional relief for a company battered by regulatory uncertainty and sinking employee morale.
Shares of Alibaba, which are listed in New York and Hong Kong, have lost more than $200 billion—roughly one-quarter of their market value—since the regulatory onslaught against Mr. Ma’s empire began late last year.
The crackdown comes as China’s leaders refashion their relationship with the country’s internet giants, whose troves of data, deep coffers and reach across all aspects of Chinese life have increasingly made them a national-security concern. Mr. Xi personally scrapped Ant’s initial public offering, The Wall Street Journal has reported, furious at Mr. Ma for criticizing his effort to limit financial risk in an October speech, and angered by the outsize payouts well-connected people stood to gain from the listing.
Chinese Premier Li Keqiang speaking at the opening session of the National People's Congress on March 5.PHOTO: KEVIN FRAYER/GETTY IMAGES
------------------------------
At the opening last week of China’s annual legislative session, Premier Li Keqiang declared that “the state supports the innovation and development of platform companies.” But Beijing also has another message for its tech giants: No matter how big or innovative they may be, they must align themselves with the state by championing causes such as poverty alleviation.
No More Special TreatmentMr. Ma, a fan of the writings of Mao Zedong, adopted the former leader’s tactics of playing localities and officials against each other, people close to him said. Over time, such methods became a liability for his businesses, said regulators and Alibaba employees.
The same day that government antitrust investigators marched into Alibaba’s headquarters in Hangzhou in December, city officials in a nearby government compound threw a large piece of cloth over the sign of a government arm established two years earlier specifically to assist the e-commerce giant.
It was an signal that the days of special treatment for Alibaba are over. Officials who have long been in Alibaba’s corner are telling the company it can no longer count on them, according to people close to Alibaba. One government meeting after another has been devoted to how to incorporate the new marching orders for preventing big tech firms from monopolizing credit and other resources.
The party boss of Alibaba’s home province, Zhejiang, has pledged to “strengthen antimonopoly efforts and prevent disorderly expansion of capital.” Other top party officials who had backed Mr. Ma in the past have echoed the message.
Alibaba’s headquarters in Hangzhou, China.PHOTO: QILAI SHEN/BLOOMBERG NEWS
-----------------------------
One was Chen Min’er, a rising political star who once urged regulators to treat Alibaba with “an open, forward-looking and innovative perspective.”
Zhejiang recently opened a channel to let local merchants report pressure from Alibaba to sell their goods exclusively on its Taobao and Tmall platforms, complaints that authorities until now had largely ignored.
The Zhejiang provincial government told the Journal that the sign for the office to assist Alibaba had been covered for renovation purposes, and that as a province that boasts vibrant internet-based businesses, it “attaches importance to improving the regulatory capabilities of the platform economy.”
‘Biggest Source of Instability’Inside Alibaba, some workers famous for their “996” hustle—a culture of working 9 a.m. to 9 p.m. six days a week—hover in limbo with little work as they await new company guidelines, according to Alibaba employees.
Some workers have started to question the way the company handled Ant’s IPO. Alibaba owns one-third of Ant, and many employees had hoped for a windfall from the stock sale. Some had even preordered cars or bid on property. While Ant Chairman Eric Jing has promised employees that the company will go public eventually, investors expect its valuation to be lower after a restructuring in line with regulators’ new requirements.
On Alibaba’s internal discussion board, some employees are openly calling Mr. Ma “the biggest source of instability” at the company.
Mr. Ma has sought to boost employee morale by saying it is common for a company to go through ups and downs. “At this time, there’s no shortage of emotions and accusations, but there’s a lack of calm, rationality and objectivity,” he said in a Feb. 27 post on the discussion board.
Mr. Ma’s personal office has suspended most interactions with an office under the party’s Central Committee that it used to be in regular contact with, according to people close to the company. Alibaba’s public-relations department has set up an office to fix a public image that many regulators have said they regard as arrogant.
Regulators’ anger at Mr. Ma’s modus operandi mounted in recent years. Depending on whom you ask, he and his tech employees were either fearless or clueless about the likelihood that their exploitation of regulatory gaps or challenges to Beijing would backfire.
In 2015, a few months after Alibaba went public on the New York Stock Exchange in what was then the world’s largest stock sale, China’s top market regulator criticized its efforts to eliminate counterfeit goods from its platforms. With support from local officials, Alibaba fired back publicly, calling the report flawed and sponsoring online articles condemning the agency’s “arbitrary methodology.”
Shortly afterward, the regulator removed the report from its website and described it as an internal memo, not an official document. After pressure from global brands, Alibaba in 2016 promised changes to how it tackled fake goods on its site.
Chinese President Xi Jinping personally scrapped Ant’s initial public offering, The Wall Street Journal has reported.PHOTO: LI GANG/XINHUA/ZUMA PRESS
------------------------------
One early inkling that Mr. Ma was falling out of favor in Beijing came in late 2018, when Mr. Xi invited some 50 entrepreneurs to rebut criticism that his policies were hurting the private sector. The group included Pony Ma, founder of Tencent Holdings Ltd. , Alibaba’s rival and owner of the popular WeChat app; Robin Li, head of search engine Baidu Inc. ; and Lei Jun, co-founder of smartphone maker Xiaomi Corp.
Mr. Ma wasn’t invited, according to officials with knowledge of the arrangement.
Mr. Xi told the executives his government wanted to strengthen rather than weaken private businesses, according to state media reports. Excluded from the public readout of the gathering, the officials said, was a blunt message Mr. Xi directed at the tech chieftains: Commercial success is secondary to the mission of beefing up the country’s technological security.
Shortly after the meeting, Pony Ma of Tencent issued a statement pledging to shoulder the responsibility and mission of turning China into an “internet power.”
Both company employees and government officials point to a key moment in May 2020, when they felt a major shift in the government’s view on Alibaba. That was when China’s chief internet watchdog, the Cyberspace Administration of China, in a report to the leadership, said Alibaba had used “capital to manipulate public opinion,” according to officials who saw the report.
The report followed an incident in April on China’s Twitter-like platform Weibo. Speculation that an Alibaba executive was having an affair had sparked a torrent of posts, but in less than an hour some users started complaining their posts were being deleted—a practice common for politically sensitive posts but unusual for celebrity gossip.
The internet watchdog said Alibaba had directed the actions of Weibo, in which Alibaba holds about 30% stake, and that it had been told to stop influencing the media, according to the people who saw the report.
The incident further riled authorities and rivals who believe Alibaba is using its stakes in social-media and media firms and its public-relations department to lobby against government policies that affect its business. The Cyberspace Administration of China didn’t respond to requests for comment.
Softer ApproachDespite the government’s anger at Alibaba’s tactics, Beijing doesn’t want to cripple the company, according to people familiar with regulators’ thinking. With more than 110,000 employees, Alibaba features a fast-expanding artificial-intelligence business and is a leading Chinese provider of cloud storage—sectors seen as key to China’s future.
When regulators opened their antimonopoly probe of Alibaba, investigators told the company to ensure that the business kept running while the investigation was going on, according to people familiar with the instructions, because any break in service could affect Alibaba users around the world.
One sign of a measure of leniency toward Alibaba came earlier this year, before the company’s sale of $5 billion worth of bonds. Investors were worried that Mr. Ma had disappeared from public view after his October speech criticizing government regulatory efforts. Beijing wanted to reassure international investors that he was safe and sound, according to some officials.
In late January, Mr. Ma resurfaced in a video published online by Tianmu News, a subsidiary of the Zhejiang provincial government’s newspaper. He was shown speaking to rural teachers as part of a philanthropy event.
Alibaba successfully sold its bonds in early February. Part of the proceeds, the company said, would be used for projects involving “green buildings, Covid-19 crisis response, renewable energy”—all government priorities.
It also helps that Mr. Ma has gradually reduced his stakes in Alibaba, holding less than 5% as of July. He retired as Alibaba’s chairman in 2019, though he has maintained significant sway over the firm. He remains the controlling shareholder in Ant.
A video recording of Jack Ma speaking to rural teachers in late January.PHOTO: JUSTIN CHIN/BLOOMBERG NEWS
------------------------------
Alibaba still faces challenges. A data-security law could force it to feed consumer data to the central government. Tighter reins on Ant’s lending business would hurt Alibaba, too, as many customers make purchases with loans from Ant.
Alibaba has lobbied legislators in an effort to avoid divestitures, according to people with direct knowledge of the matter. Sales of noncore businesses would be easier to absorb for the company than anything in its core e-commerce operations.
On March 1, Study Times, a newspaper published by the elite Central Party School, published an interview with a former senior Zhejiang official, who attributed Alibaba’s success partly to Mr. Xi, who promoted information technology when he ran Zhejiang from 2002 to 2007, during Alibaba’s early days.
It is rare that a publication so close to the party’s center mentions a private-sector company at all, and to do so in direct connection to Mr. Xi suggested the company still matters to the leadership. There was no mention of Mr. Ma in the article.
Alibaba recently received a government certificate recognizing it as a “model” for Mr. Xi’s initiative to root out poverty, which Alibaba swiftly posted on its social-media account. Meanwhile, Mr. Ma was left off a list of business leaders compiled by government-controlled Shanghai Securities News.
The message was clear: Follow the party, not the man who founded the company.
Write to Keith Zhai at keith.zhai@wsj.com and Lingling Wei at lingling.wei@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the March 12, 2021, print edition as 'China Lays Plans to Tame E-Commerce Giant Alibaba.'
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