Since Jack Ma’s controversial comments at the high-profile financial forum in Shanghai, the once outspoken Chinese billionaire has steadily disappeared from the media purview, with sightings of the semi-retired entrepreneur becoming rare. It turns out that Ma during this unplanned hiatus had been playing golf and sketching. However, what led to this? What happened to Jack?
THE CONTROVERSIAL SHANGHAI FORUM
Source: South China Morning post
This whole saga began with Ma’s disparaging remarks about Chinese Banks at a high-profile financial forum in Shanghai. At the forum, Ma as part of his speech labeled the global banking Basel Accords as an “old people’s club”, that China’s biggest risk is its lack of a financial ecosystem and referred to Chinese banks as “pawn shops”. The consequences of Ma’s statement came in two parts. The first occurred swiftly when Ma was summoned by the financial watchdogs in Beijing the following week and given a dressing down. Immediately after, Beijing issued draft rules on online microlending, which could curb the profits of fintech giants such as Ant Group, which was the latest project that Ma had been working on and which had inspired him to make a contrast between traditional banks and fintech companies such as Ant.
The second and financially more devastating consequence was the Shanghai Stock Exchange’s suspension of Ant’s listing, citing Ma’s meeting with Beijing watchdogs and the subsequent regulatory changes as the reason. Ant subsequently suspended its listing on Hong Kong IPO as well. With Ant’s IPO expected to raise USD$35billion, this saga many thought, was sparked by the hubris of Jack Ma.
WHAT HAPPENED NEXT?
Following these devastating consequences, Ma had recused himself from the public eye for more than two months, even missing a scheduled appearance as a judge in the final episode of the talent show, Africa’s Business Heroes, which was his own talent show. This then sparked a social media frenzy, with rumors that the billionaire was missing, gaining traction. However, the rumor was proven false (obviously) when a 50- second live video appearance of Ma attending a rural teacher-themed social welfare event surfaced. Ma’s appearance succeeded in soothing investors, later resulting in Alibaba’s shares seeing an increase on the Hong Kong stock exchange.
As of early this month, Ant Group and China banks have come to an agreement, with the two groups agreeing to rein in their joint loans to consumers. This move comes on the heels of Ant Group’s discussions with Chinese authorities on a restructuring plan, which brings them a step closer to relaunching their IPO albeit at a lower valuation than first expected.
Jack Ma, an eccentric billionaire that commands a cult-like reverence in China. Better known for his blunt and direct style, he has often made waves on the international stage with his comments. With the remainder of the Ant Group saga, could Jack afford to maintain this persona?