- Analysts say Ma’s criticism of authorities likely reason for Ant Group’s IPO being halted.
- For years, Jack Ma represented the rise of the self-made tech entrepreneur in China, with Chinese media referring to the years of heady growth for the sector as the ‘era of Ma Yun’.
- A path paved by the success of his e-commerce giant Alibaba and its online finance spin-off, Ant Group.
- After the suspension, shares in Alibaba, which owns part of Ant, fell more than 8%, shaving $3bn (£2.3bn) off Ma’s net worth.
Internet users opinion
Financial technology regulatory environment
In a characteristically blunt speech, Ma directly criticised local regulators and the state-dominated banking sector. “We shouldn’t use the way to manage a train station to regulate an airport,” Ma said. “We cannot regulate the future with yesterday’s means.”
China’s central bank
Ma was speaking alongside top officials such as Wang Qishan, former security tsar and Chinese leader Xi Jinping’s right-hand man, Yi Gang, the governor of China’s central bank, and Zou Jiayi, vice minister at the ministry of finance.
The entrepreneur’s comments came just after a speech by Wang warning that there should be a balance between financial innovation and regulation. “Safety always comes first,” Wang said.
Overcoming the challenges
Yet it was Ma’s comments that went viral on Chinese social media and were seen as a direct attack on officials. Less than two weeks later, Ma, along with two other executives, was summoned to meet financial regulators, and the next day the IPO was halted. In a statement on social media, Ant said it would “overcome the challenges” and “embrace regulation”.
Chinese state media and commentators
The Chinese state media and commentators have piled on criticism of Ma, justifying the move. The People’s Daily published an article on Wednesday claiming “financial security is an important part of national security” and calling for financial institutions to “strengthen the Party’s leadership”.
The episode also underlines official unease over the rise of online finance, dominated by companies such as Ant and Tencent whose digital payments platforms allow customers to make all their purchases with mobile money as well as invest and borrow.
In an article late on Tuesday, the state-run Economic Daily said suspending Ant Group’s listing was to “better protect the rights and interests of financial consumers”.
Without naming the company, which rebranded itself from Ant Financial to Ant Technology earlier this year, the paper said some companies had changed their name to avoid scrutiny as a financial institution.
Observers say that by taking Ma down a peg, China’s top officials are also reminding the country’s wealthy who is in charge.
Regulator intervention
“Many might point to such regulator intervention and say: ‘Look, it also affects the tycoons.’ In fact, in a way it applies more to PRC tycoons as money means power, and this would signal that it can be taken away if you don’t play ball,” said Benjamin Qiu, a Hong Kong-based partner at an international law firm.
That message was circulated on Chinese social media where some posted a scene from a 2017 kung-fu film starring Ma where his character profusely apologises to a group of police. Others turned the tagline for Ant into a Chinese idiom to mean “Jack Ma has now been tamed.”
China’s reputation
Still, others questioned whether in the long term China’s reputation as open for business may be hurt. Chinese leaders have recently hammered out the country’s next five-year plan, which promises to support the Covid-hit economy with innovation in the tech sector and by boosting domestic demand.
“It is 2020. If the government intervenes too much, more good companies will flee,” one commentator wrote on Weibo. Another said: “There is never a good ending for big Chinese businessmen.”
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Source: The Guardian
