Ma’s record penalty for Alibaba marks the tumultuous extent for its founder

BEIJING (Reuters) – Once seemingly untouchable, Alibaba founder Jack Ma endured a tumultuous run that saw its Chinese e-commerce giant hit a record 18 billion yuan ($ 2.75 billion) fine on Saturday , resolving a key uncertainty even while others persist for himself and his business empire.

The reversal of wealth for 56-year-old Ma, who disappeared from public view in an October speech that dumped China’s regulatory system, was striking for an entrepreneur whose trade transformation in China – and his optimism relentless – revered like a cult.

Ma, who gave up Alibaba in 2019 but is getting closer in the corporate psyche and in the eyes of investors, enjoyed overstepping the boundaries with bold statements, taking a high profile even when most Chinese colleagues held their heads down.

Friends from high places, as well as pride in Alibaba’s success, protected Ma, sources said.

That was until his Shanghai speech sparked a backlash that dropped a $ 37 billion IPO for Alibaba-affiliated financial group Ant Group, as well as a downsizing of the authorities over the e-commerce giant itself. and the wider “platform economy”, which continues to reverberate.

Ant, whose rapid growth and free-lending practice has raised regulatory concerns about financial risk, remains undergoing a forced restructuring that is expected to limit some of the most profitable businesses and reduce its valuation.

“Entrepreneurship must be disruptive. But being challenged by the government has its limits, ”said Duncan Clark, chairman of Beijing BDA China Technology Consulting and author of a book on Alibaba and Ma.

Saturday’s settlement, he said, “should draw a line” on the matter for Alibaba.]

“But for Ant and Jack, there is still no line drawn,” he said.

Alibaba declined to comment on Ma, and its foundation did not immediately respond to a request for comment Sunday.

CONSPICIOUS ABSENCE

Ma’s absence from public view became apparent until she first appeared in three months, in late January, talking to a group of teachers via video, which boosted Alibaba’s shares. He continued to keep an extremely low profile.

“He plays a lot of golf and improves his disability,” said a person who knows him.

A former English teacher, Ma co-founded Alibaba in 1999 from a shared apartment in the eastern city of Hangzhou, eventually building a colossus covering e-commerce, financial services, cloud computing and even supermarkets, making him the most famous man of business in China.

He was also the richest in China, until the restriction brought him to fourth place on the Hurun Global Rich List published in March, although the wealth of Ma and his family increased by 22% last year to 360 billion. yuan, according to the list.

Last July, he owned 4.8% of Alibaba.

In 2018, Ma was revealed to be a member of the Communist Party by his official newspaper, denying the public assumption that he was not politically attached.

“ARROGANT REDUCTION”

Ma has often been described in the Chinese media as a source of national pride and even legend. His global prominence made him an almost diplomatic figure. Countless books have been published on the founding of Alibaba and Ma’s business tactics.

Mathematics such as “It’s hard today, tomorrow will be worse, but the day after tomorrow will be sunny” are common in Chinese business circles. In Hangzhou, small businesses are known to have created altars adorned with images of Ma to bring good luck.

But in a February speech, Ma was left on a list of Chinese entrepreneurial leaders published by the state media.

Franklin Chu, president of Sage Capital in Rye, New York, noted that Alibaba shares trade at a 30% discount up to a maximum of 52 weeks.

“I call this ‘reducing Jack Ma’s arrogance,’ combined with China’s recent round of bashing out of Washington,” he said.

Alibaba, he said, “has to work hard to restore an accommodative relationship with its regulatory managers.”

Since retiring, Ma has tried to focus on philanthropy and education, including her charitable trust, the Jack Ma Foundation, and two schools in Hangzhou.

Ma was an active participant in the conference, making at least 12 appearances in 2019 before the start of the COVID-19 pandemic. In March 2020, he opened a Twitter account – the platform is blocked in China – which mainly sent tweets about efforts to prevent his foundation COVID-19. His last tweet was on October 10.

“It is crucial for Chinese entrepreneurs to be discreet. Don’t talk casually. And don’t say anything wrong, “said Edward Chen, chairman of Shanghai-based fintech consultancy China Rising Group, in a video on social media.

„Prudence in words and action is the priority no. 1, so that Chinese entrepreneurs can live longer ”.

($ 1 = 6.5522 Chinese yuan renminbi)