Chinese media outlets have been told to censor their coverage of the government’s probe into Alibaba in a “severe and unusual move”.
Alibaba has seen its shares drop by around 25 per cent since October when its founder Jack Ma made a highly critical speech about the country’s regulator and state-owned banks.
The now notorious speech sparked a fierce backlash from the Chinese government, who launched an official investigation and imposed fines and clampdowns on Ma’s numerous businesses.
Ma has also not been seen since the speech, leading to rife speculation over his whereabouts.
According to the Financial Times, the state’s propaganda arm has directed media outlets to “strictly invoke” the official narrative when reporting on the antitrust investigation into Alibaba, and “not make changes or engage in extended analysis without permission”.
“If any company announcements oppose the official stance, do not publish, do not re-post, do not quote foreign media,” the directive said.
Xiao Qiang, a research analyst at the University of California at Berkeley School of Information, said this directive was “severe and unusual”, using language usually reserved for “directives on ‘very important political event’ reports such as the trial of Bo Xilai.
“The investments of Ma’s companies are directly associated with some of China’s most powerful political families. The fact that this time he is getting into trouble with the Chinese state likely has high politics in the background, not just because he made one speech which may have hit Xi (Jinping) or some other party official’s nerve.”
The state crackdown on Alibaba and Chinese big tech has caused many prominent investors, including activist investor Carson Block, to dub these companies’ shares “uninvestible”.
He told The Mail on Sunday: “Jack Ma’s inability to be seen in public is just one of the reasons why we believe China equities are uninvestible.
“I’m of the view many of the companies from China that are publicly traded in the US are committing accounting fraud to some extent, overstating profits, often revenue, and cash. The first risk is you’re investing in bulls*** numbers.”