In the hours after Chinese regulators halted what would have been the world’s largest share offering in history, of Jack Ma’s Ant Group, a phrase began circulating on the Chinese internet: “There is no so-called era of Ma Yun, only Ma Yun as part of the era.”
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.
“Wealth is an ant in front of power,” internet users quipped, while others posted the phrase heralding the end of Ma’s era, taken from the headline of a previously published editorial by the state-run People’s Daily disparaging the worship of celebrity businessmen like Ma.
Analysts say the unusual and dramatic halt of the initial public offering (IPO) less than 48 hours before it was to begin trading in Shanghai and Hong Kong underlines the dominance of the Chinese Communist party over the private sector – and the danger of criticising those in charge.
“The party has once again reminded all private entrepreneurs that no matter how rich and successful you are it can pull the rug out from under your feet at any time,” wrote Bill Bishop, the author of the China-focused newsletter Sinocism.
Regulators cited “changes to the financial technology regulatory environment and other major issues” for the halt. While Beijing on Monday issued draft rules on micro-lending that would affect a key part of Ant’s business, analysts say the last-minute suspension is more likely to do with remarks Ma gave on 24 October at a summit in Shanghai.
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.”
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.Advertisementhttps://29644671da68c33ba5f2142f286e2615.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
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.
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”.