The year 2020 could have been the best year for Jack Ma, the billionaire founder of fintech giant Ant Group Co. Ltd. But now, he is paying an extremely high price for challenging the Chinese Communist Party.
The state has pulled the plug on the ANT group, which could have been the biggest Fintech Company in the world. The initial public offering of Ant Group, the internet finance giant, was ready with its $34 billion stock debut in Shanghai and Hong Kong.
This would have been the biggest IPO, or first sale of stock in the world – greater than the listing of Saudi Aramco, the state-run oil giant, when it went public last year. But the initiative received a huge blow from the Chinese authorities as the government suspended the public listing of the company abruptly.
This caused a severe setback to Jack Ma, who is one of the most admired entrepreneurs in China, and also an enthusiastic member of the Communist Party. According to sources, this was done to reduce Jack Ma’s powers, in economic and political spheres.
The Chinese Government couldn’t stand one person in the country wielding that amount of power. It is also a statement that China wants to send across to its people – nobody in the country will be allowed to go big unless it is the will of the government.
Ant filed to go public in August, nearly a decade after the company was spun out of Alibaba. Ant’s Alipay app is used by more than 730 million people every month. It has become a major portal for personal credit, loans, investments and insurance in addition to a payment tool.
ANT was at first walking towards its November 5 IPO and pulling in a great deal of investors all the while – it had some $3 trillion in orders for its dual listing in Hong Kong and Shanghai. ANT’s IPO was relied upon to try and shroud the $29bn IPO for Saudi Arabia’s oil monster Aramco, so far, the world’s greatest public offer deal.
However, at a press conference in October, Jack Ma criticized the Chinese Financial regulatory system. He called it outdated and said that the “financial regulators seem a kind of club for the elderly who want to play it too safe, something that is not good for “youth” economies like China’s.”
He accused China’s banks of behaving like “pawnshops” by lending only to those who could put up collateral.
He strongly criticized the financial regulators for being extremely cautious and said that “there is no innovation in this world without risk.”
Jack Ma’s comments came just a few hours after the conference’s keynote speaker, Chinese Vice President Wang Qishan, declared that China would “keep away from the wrongful paths of excessive speculation, self-reinforcing cycles of financial bubbles and Ponzi schemes.”
His comments did not go down well by the Chinese Government. Ma was called to Beijing for a meeting with Government officials on November 2, immediately following which, ANT was pulled out of Shanghai Stock Exchange.
This is not the first time that China has lashed out upon its critics. Earlier this year, former Chair of the state-owned Beijing Huayuan Group Co. Ltd, Ren Zhiqiang, was sentenced to 18 years in prison for criticizing the Chinese Government and its poor handling of the pandemic. He also dared to refer to Xi Jinping as a “clown.”