Billionaire Jack Ma’s company Alibaba is targeted by the Chinese authorities. The Alibaba group is the largest online mail order company in China and was founded in 1999 by the former English teacher Jack Ma. Since the end of December it has been announced that Alibaba will now have to undergo investigations by the Chinese antitrust authorities.
As the reason for the investigation, “monopoly practices” are given, as announced by the supervisory authority in Beijing. The aim is to examine whether competition law and monopoly law are being violated. The authorities also want to “hold talks” with the subsidiary finance company Ant. Ant belongs to Alipay, the leading payment service provider in China. Critical voices from the Chinese banking sector also grew louder against him. The service provider transfers around 14.4 billion euros annually and is used by more than 700 million people. The online service intervenes in the “state-controlled financial sector” by also granting “loans to households and smaller companies” and offering “asset management and insurance”, as n-tv reports. The subsidiary Ant had to cancel its IPO in November. As it now turned out because of the beginning Chinese investigations against the company. The planned IPO would have been the largest in economic history, with a total of around 30 billion euros. Subsidiary Ant’s shares plummeted more than three percent after it was announced that it was being investigated. Alibaba’s entire share price plummeted more than eight percent.
The Aliaba group has “obviously become too powerful for the communist leadership,” as the Tagesschau writes. So far, experts suspect that the Chinese government will either break up the company or take it under its own control. The group has a market value of around 500 billion euros and is one of the most valuable corporations in the world. The investigations into the company send a clear signal to the government: “Anyone who becomes too self-confident and too powerful in China will be trimmed by the government” , so Steffen Wurzel for the Tagesschau. Alibaba is a private corporation, but according to China’s President Xi Jinping, the private sector in the country is also increasingly adhering to the terms of its communist parties.
Jack Ma announced that he would “actively cooperate” with the government in the investigation and “carefully study and strictly implement” the orders of the authorities. The founder of Alibaba, otherwise often appeared in public, but has not been seen for a few weeks. Apparently the Chinese government asked him not to leave the country for the time being. Ma criticized the country’s financial system a few months ago, describing it as out of date and comparing it to traditional Chinese pawn shops. He also accused “local and global government agencies” of slowing down innovation, as the Tagesschau writes. Then he and two other managers were called to the country’s financial supervisory authority, who informed him that the subsidiary Ant in particular would be monitored more closely.
Analyst Dong Xiamiao told the news company Bloomberg that there was increasing “coordinated effort” to “shackle the Jack Ma empire”. It is the “underlying political message that no company and no individual in China can grow so large that they could potentially challenge the authority of the Chinese Communist Party,” as Richard McGregor, East Asia expert from Sydney, describes.
Information on the vita of the company founder: The 56-year-old company founder Jack Ma was born in the province of Zhejian. His parents were musicians and traditional Chinese storytellers. After studying English and international trade, he founded Alibaba in the late 1990s with around $ 60,000 in seed capital. In 2013 he gave up the management of the company in order, among other things, to do more for charitable purposes. In 2015, he was ranked 33rd among the richest people in the world on the Forbes list.
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