Chinese President Xi Jinping has reportedly directly intervened to tame Jack Ma and his company. In the latest news, the reason is not only because the founder of Alibaba criticized China’s financial system in his speech, but there is also a political element.
The speech criticized China’s outdated financial system, angering the Chinese government and Xi Jinping. The IPO of Ant Financial, a fintech company owned by Jack Ma, was cancelled. Even Jack Ma himself had not known his fate until 3 months.
However, Jack Ma is believed not to have been detained or subjected to severe witnesses, as evidenced by his recent appearance even though it was only in an online video. It could be said he was only given a lesson.
Well, according to a recent report from the Wall Street Journal citing related sources, it is indicated that Xi Jinping sacked Jack Ma and Ant Financial because it was feared there was a flow of funds to Xi’s political opponents and could be a challenge in the future.
According to the WSJ, Beijing is concerned about ant financial’s complex ownership structure. There are some figures that Xi Jinping may not like to benefit greatly from the IPO.
“In the weeks before the fintech giant went public, a previously unreported central government investigation found ownership of ant complex,” said WSJ quoted by detikINET from Opindia, Saturday (27/2/2021).
“Behind the layers of investment vehicles that have stakes in the company are some of China’s strongman, including those with ties to the political family that present potential challenges for president Xi and his inner circle,” the WSJ added.
For example, one of Ant’s investors is Boyu Capital, a company founded by Jiang Zicheng. Zhiceng is the grandson of former Chinese leader Jiang Zemin.
That’s why Ant Financial’s IPO was subsequently thwarted and Jack Ma tamed. Nevertheless, Xi Jinping is said not to be acting too harshly.
“Xi Jinping pressed big private companies, made sure they worked for the Party, made sure they weren’t too big. No private company is too big to be punished,” Gregor said
“I think Alibaba will still be a substantial company and Jack Ma will certainly still be an important businessman. But his wings have been ringed,” Gregor said.