Jack Ma, China’s richest man, had challenged the traditional banking system with his Ant Group. For this he was presented with the bill.
There is a popular saying in China that the nail that protrudes the highest is hammered in first. On Tuesday, the state sledge hammer finally met the richest man in the country: entrepreneur Jack Ma, who wanted to make history with the record IPO of his Ant Group.
Investors have been looking forward to the spectacular deal for weeks, the fintech from Hangzhou had already collected more than 37 billion US dollars. The challenge to Wall Street was more surprising than the sheer dimension: the financial services provider Ant should have been listed in Shanghai and Hong Kong.
Nothing will come of this for the time being; the Shanghai Stock Exchange had officially declared that Ant Group could not meet its disclosure obligations. Foreign Office spokesman Wang Wenbin added on Wednesday that they wanted to “protect capital market stability and the interests of investors”. In fact, the Ant Group acts diametrically to the bureaucratic big banks in China, which mainly grant loans to bloated state-owned companies. Medium-sized business people and ordinary consumers turn to Ant for loans.
But in modern China, the official reason never tells the whole truth. Much suggests that Jack Ma has to pay the price for a daring speech two weeks ago. At that time, he gave a lecture at the Bund Financial Forum in Shanghai that reads like a declaration of war on the Chinese banking system. “Today’s banks continue the pawnshop mentality,” said the English teacher about. And: that mentality could “not support the financial needs of global development over the next 30 years”. Big banks are like rivers, Ma added in his metaphorical language. What is needed, however, are lakes and ponds, streams and swamps. Without this one would be drowned in the floods. Particularly precarious: the elite of China’s financial system sat close together in the audience – and most likely angry about Jack Ma’s insubordination.
The Bill Gates of China
His Ant Group is now under massive pressure. The parent company Alibaba took a real nosedive on the Hong Kong stock exchange on Wednesday: the price of the online trading company collapsed over seven percent.
Two years ago, rumors were booming that the leadership of the Communist Party had sidelined the entrepreneur star Jack Ma: At that time, the now 56-year-old announced his retirement from the day-to-day business of his e-commerce empire. Quite early for a man at the zenith of his career, observers rumored. The assumption was obvious: the paranoid chief ideologist of China, head of state Xi Jinping, Ma was too powerful.
But Ma is more present in the domestic media than ever before. Like Bill Gates, the Alibaba founder focuses primarily on philanthropic projects with his foundation, but he still holds the strings in hand through his company shares.
Indeed, the Communist Party cannot afford to saw off its most dazzling entrepreneur. Jack Ma personifies the “Chinese dream” like no other: As a simple student, he struggled with ambition and visionary ideas – and not, as usual in China, with the right family background – to prosperity. In doing so, he shaped a whole generation of start-up founders and entrepreneurs who wanted to break away from the old structures. If Jack Ma falls, the promise that everyone in China can make money will also burst. But it is precisely this that would pose a great threat to social stability in the country, as the Chinese accept the extensive repression of the authoritarian system primarily because they have the prospect of a materially better future.
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