Xinhua’s cryptic line: “Don’t talk casually, don’t do things casually, and people should not be casual”. Image from the Stand News. Used with permission.

Earlier this month, the financial world was shocked by the sudden suspension of Ant Group’s initial public offering (IPO), set to debut on the Hong Kong and Shanghai stock market on November 2. With 34 billion USD in proceeds, it would have been the world’s biggest stock debut in history.

Ant Group, formerly known as Alipay, is the world’s highest-valued fintech company. It has over 730 million users, mainly located in mainland China, who rely on its multiple financial services to shop, take small loans, transfer money to each other, and invest their savings. Alibaba, who Jack Ma cofounded, owns a one-third stake in Ant Group, rendering him the latter’s controlling shareholder.

One day before Ant Group announced it was putting the brakes on the IPO, Ma and other senior executives were summoned to a closed-door meeting with China’s banking regulator. Ant Group released a brief statement saying that the meeting was about “the health and stability of the financial sector.” Naturally, widespread speculation that the Chinese government had intervened to thwart the company’s move followed suit.

Then, on November 12, the Wall Street Journal revealed, citing anonymous Chinese official sources, that President Xi Jinping personally made the call to halt Ant Group’s stock exchange debut.

The news confirmed a belief shared by many Chinese netizens: That President Xi distrusts Ma. After all, he wouldn’t be the first to get into Xi’s crosshairs, whose presidency has been distinguished by a relentless crackdown on billionaires who don’t toe the party line.

In 2017, Chinese-Canadian businessman Xiao Jinhua was abducted in Hong Kong and taken to mainland China, where he remains in jail. Around the same time, businessman Guo Wengui went into exile to the U.S. and transformed himself into an anti-China activist. Other billionaires recently arrested and charged with corruption or economic crimes are Ye Jianming, former Chairman of CEFC China Energy Company Limited, and property tycoon Ren Zhiqiang.

Ma has long proclaimed to be his mission to transform China’s stiff and outdated banking system. Ant’s financial services, in his view, help channel capital to small businesses and ordinary citizens, while weathering the risk of bad debt with artificial intelligence — or, to put it simply, a private credit score system.

As in many other countries, Ant group and other fintech businesses have so far operated under looser regulation than traditional banks in China. Borrowers do not need to present guarantees for their micro-loans but agree on higher interest rates. Such conditions present a huge risk of default, which is why Chinese regulators plan to introduce new rules of supervision and management to the sector. It is anticipated, for example, that the new regulations would restrict Chinese banks’ funding to fintech companies.

New regulations aside, many Chinese netizens are wondering how political was the decision to halt Ant Group’s IPO, and have dig through the internet to find clues.

In addition, it seems that Ma, a once-celebrated innovation hero in China, has taken a reputational hit — at least judging by recent comments on Weibo.

Subliminal messages

Even before the WSJ reported on Xi’s involvement, Chinese netizens have searched for clues on China’s state-owned media as to why the IPO had been suspended.

Many pointed to a cryptic article published on Xinhua on the night of the closed-door meeting. The headline of the article says “Don’t talk casually, don’t do things casually, and people should not be casual” (話不可以隨口，事不可隨心，人不可隨意). The article also shows a painting depicting a horse striding over clouds; In Chinese, horse is 馬 (“ma”) and cloud is 雲 (“yun”) — that’s Jack Ma’s Chinese name.

Above the painting, the article says: “Everything has its costs, if you don’t have the capital, don’t do whatever you want.” (任何事情背後都有代價，如果沒有資本，就不要隨心所欲。)

Brian Cheng posted a screenshot of the painting on Twitter and asked about Jack Ma’s whereabouts:

Meanwhile, netizens interpreted the “don’t talk casually” of the article’s headline as a reference to a talk Ma delivered at a conference in Shanghai on October 24 in which he outlined his bank-transformation mission.

They have circulated on social media a chart, produced by Chinese finance news outlet Caixin, showing the distribution of Ant Group’s shares.

@LifetimeUSCN posted the chart on Twitter, highlighting the fact that the family of former Chinese president Jiang Zemin has a stake in the Group:

In recent years, Caixin often brings down people with its investigations. Its most recent investigation is on Ant Group. From the chart, we see that among the top ranking CCP members, only Boyu Capital, controlled by Jiang Zeming’s family, has direct holding in the group. It is pretty clear that the distribution of interest has lost the balance.

After the WSJ story, more “evidence” of Xi Jinping’s distrust of Jack Ma emerged on Weibo.

One much-circulated item was a video compilation (via Twitter) of Jack Ma’s public speeches between 2015 and 2018. When asked whether his fund for young entrepreneurs would be open to young people who had participated in the 2014 pro-democracy protests in Hong Kong, Ma replied “why not?”

In 2018, when delivering a speech about Hong Kong’s role in China’s Belt and Road Initiatives, he praised Hong Kong’s “One Country, Two Systems,” saying that if the same political system was introduced to Zhejiang, where Ant Group’s headquarters is located, the city would prosper.

Reputational shift

Recent comments on Weibo slammed Jack Ma’s public speeches for not sticking to the party line. For example:

Conspiracy theories also circulated on Chinese social media. The following one has been cross-posted by many Weibo and WeChat users:

Many find the political purge and shift of public opinion on Chinese social media appalling. Twitter user @songma said:

Read some articles circulated on WeChat, now the Ant Group is labelled as a “scam group”. Everyone was jealous about Jack Ma’s success, but in this country with 1.4 billion population, it just takes one week to turn him into a villain.

Analysts anticipate that Ant Group will resume its IPO after Beijing introduces the new set of regulations for the sector. But it remains to be seen whether Jack Ma’s reputation will be restored.