What led to China blocking Jack Ma’s record IPO?
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The WSJ report described them as "a coterie of well-connected Chinese power players, including some with links to political families that represent a potential challenge to President Xi and his inner circle.”
China President Xi Jinping pushed for blocking what would have been a record-breaking initial public offering (IPO) for billionaire Jack Ma’s Ant Group in 2020. It happened because of Communist Party-linked “political families” that stood to gain billions of dollars through opaque investment vehicles, according to a new report.
According to a report published in the Wall Street Journal, investment companies linked to the grandson of former President Jiang Zemin and the son-in-law of former Politburo Standing Committee member Jia Qinglin stood to profit from the IPO with their ownership in the Ant Group.
Ant Group is the financial payments arm of Ma’s Alibaba empire.
A lot has been written about what went wrong. There are many possibilities.
The WSJ report described them as "a coterie of well-connected Chinese power players, including some with links to political families that represent a potential challenge to President Xi and his inner circle.”
Among the families is Boyu Capital, a private-equity firm founded by Jiang’s grandson, Jiang Zhicheng.
Another is Li Botan, who controls the Beijing Zhaode Group, that has invested in Ant through three layers of investment vehicles, the report said.
Li is the son-in-law of Jia Qinglin, a senior leader who served on the top Politburo Standing Committee for ten years until 2012 and is close to Jiang.
The investment vehicles tied to party-linked families, according to the Wall Street Journal, added to other concerns the leadership had about the Ant Group IPO.
The last-minute suspension in early November of the $35 billion IPO of the Ant Group, which is Alibaba’s financial arm and behind Alipay, China’s biggest digital payments company, triggered intense speculation about the fate of Ma, but subsequent reports have said he is working with regulators to address their concerns.
Reports earlier this month said regulators and the group were close to agreeing a restructuring plan, which would put all of Ant’s businesses into a financial holding company and subject it to requirements that apply to banks.