Alibaba’s founder and Jack Ma is reportedly lying low following the Chinese government’s crackdown on his businesses but is not “missing”.
Earlier this week it was reported that Ma, China’s second richest man, had not been seen in public for a number of weeks after making a highly critical speech of China’s financial system, fuelling speculation he had been “captured”.
However according to CNBC’s David Faber, sources familiar with the matter say Ma is “being less visible purposefully” in response to the government’s regulatory crackdown.
“He may not have shown up, but he’s not missing,” Faber said, adding that he was likely in Hangzhou where Alibaba is headquartered.
“He hasn’t been captured, he hasn’t been taken, this is not a Chairman Wu situation”.
Despite Ma’s relative fame in and outside of China, it would not be the first time a prominent businessman has been detained by the Chinese government.
Chairman Wu, as referenced by Fraber, was the chairman of Anbang Insurance who was sentenced to 18 years in prison in 2018 after his offices were raided by authorities.
Wu was investigated for economic crimes as part of China’s sweeping review of systematic risk regulations.
A year earlier asset manager Xiao Jianhua was abducted from his Hong Kong hotel and taken into Chinese custody after being accused of siphoning investors from the stock market.
It comes after he made a “fiercely critical” speech at the Bund summit in Shanghai in which he slammed China’s financial regulatory system, accusing traditional lenders of having a “pawn shop” mentality and calling for change.
Chinese officials reacted swiftly to the criticism launching investigations, fines and clampdowns on Ma’s numerous businesses, causing Alibaba’s shares to drop more than 25 per cent since October wiping more than $10 billion off of its market value.
This began in November when the Chinese government effectively blocked Ant Financial, a fintech company founded by Ma and 33 per cent owned by Alibaba, from launching a record breaking $37 billion IPO on the Shanghai and Hong Kong stock exchanges.
Chinese authorities summoned Ant Group’s key executives, including Ma, to a meeting in which they were told Ant’s online lending business would face far tighter scrutiny for online micro-lending in a bid to rein in rising debt levels, informing the company it would need to abide by these rules in order to list just days before the IPO.
A day later, both the Hong Kong and Shanghai stock exchanges informed told Ant that “changes in the financial technology regulatory environment” would result in the company “not meeting the conditions for listing”, effectively suspending the IPO.