Jack Ma’s sad ending: When the most powerful empire in China was cut off its wings, leaving only a shadow

Tram Ho

“Praise the horse” is a term that is now very popular in China, referring to the process by which the Chinese government gradually breaks down Jack Ma’s power. His empire as of June 2021 is only half what it was worth nine months ago.

Cái kết buồn của Jack Ma: Khi đế chế hùng mạnh nhất Trung Quốc bị chặt gãy đôi cánh, chỉ còn lại cái bóng mờ - Ảnh 1.

That process is not over yet. Step by step, Jack Ma’s mighty empire was stripped of influence, as their money-making businesses were assigned to another company to handle.

Used to be the most powerful man

A year ago, Jack Ma (or Ma Van) was the richest man in China. He is the founder of large technology company Alibaba, and opened The Ant Group – also the largest financial technology group in the world. His empire had attained enormous power, rivaling the giants of the West. Alibaba’s value sometimes exceeds that of many American companies, only behind Apple, Amazon and Google.

Cái kết buồn của Jack Ma: Khi đế chế hùng mạnh nhất Trung Quốc bị chặt gãy đôi cánh, chỉ còn lại cái bóng mờ - Ảnh 2.

In terms of fame, Jack Ma is like a global star, the most famous Chinese. He is like Jeff Bezos, Elon Musk and Bill gates combined. The two companies founded by Jack Ma are like an icon, creating an “age of Jack Ma” – Chinese media hailed.

Such a powerful empire would obviously attract attention when it suddenly depreciated in value. Ma’s assets were taken away, “down in price” without brake, in what is known as the “rectification” of the Chinese government towards the man who is becoming increasingly difficult to control.

Pony testimonies

After a speech criticizing the legal system for hindering the development of businesses in China in October 2020, Jack Ma and companies in his empire were brought under investigation. This is also the time, the process of “restraint the horse Ma Van” begins.

The first is the IPO deal of Ant Group. It was an IPO that should have hit a world record. Because before that, the biggest IPO deal belonged to Alibaba in 2014, while Ant surpassed that milestone by 40%.

Cái kết buồn của Jack Ma: Khi đế chế hùng mạnh nhất Trung Quốc bị chặt gãy đôi cánh, chỉ còn lại cái bóng mờ - Ảnh 3.

That terrible scale cannot even describe the whole picture of this sale. It became a real financial phenomenon with the value of shares in the private market having increased by 50% before the effective date, while registrations were 80 times higher than the regulation. The Wall Street Journal called it “a $3 trillion (dollar) scramble.” As for Jack Ma himself, he said this is also the largest IPO in human history.

But when you poke the fire ant nest, you will be bitten. That IPO was canceled, Ant was required to stop the IPO and become a corporation under the management of the central bank. Following that, Ant was gradually phased out, as the internal financial sectors were restructured, operating with new partners.

Ant’s most valuable assets have also been noticed – customer data from billions of transactions made. Tech experts say this huge amount of data is a huge competitive advantage that Ant has, to easily surpass traditional banks in making credit lending decisions.

“Ant is required to give up the ‘monopoly of information’ with huge amounts of customer data,” – according to the central bank’s announcement.

Eliminate the advantages from the Ant . Monetary Fund

The Ant Group’s money market is arguably the most explosive success story ever. In just 4 years, they have the largest money fund in the world, surpassing both Fidelity and JP Morgan of the US and countless major banks in the world. The fund was built by inviting Chinese consumers to keep their money idle in an account at this company.

Cái kết buồn của Jack Ma: Khi đế chế hùng mạnh nhất Trung Quốc bị chặt gãy đôi cánh, chỉ còn lại cái bóng mờ - Ảnh 4.

And again, that advantage is interfered with. Ant sales are down 18% in the first quarter of 2021, and 50% from their peak.

“Ant Group’s financial fund has shrunk to its lowest level in four years, as users switched to services of companies spun off from Ant. The group was required to reduce the size of the fund under commitment. restructuring agreement signed with the government.”

Record fines and unnamed troubles

In April 2021, a record $2.8 billion fine was imposed on Jack Ma’s Alibaba for violating antitrust regulations. This number is nothing compared to the losses they suffered when Ant was split, but what was more important was the accusation. The company was accused of “rigging the market”, and was forced to “rectify” and “downsize” immediately.

The Chinese government also imposed several fines on the corporation. They’re small, but many times that’s another matter. For example, Alibaba’s famous browser (which ranks 2nd in the market with 400 million users) has been wiped out, no longer present on all app stores in March 2021. Then in April, the Chinese government announced an investigation into Ant’s dealings with the Shanghai Stock Exchange, with allegations of insider trading and bribery.

Jack Ma’s university is closed

Also in April 2021, Jack Ma resigned as president of Hupan University – the business school he founded in 2015, with a lot of enthusiasm put into it.

Hupan was originally a school with many points of innovation and ambition. Jack Ma believes that this is a promising environment for business education, with new approaches far ahead of many others. Getting into this school is not easy. It took 6 months of rigorous selection to open. The class leader is CEO from tech unicorn companies in China.

Cái kết buồn của Jack Ma: Khi đế chế hùng mạnh nhất Trung Quốc bị chặt gãy đôi cánh, chỉ còn lại cái bóng mờ - Ảnh 5.

But that school was in trouble, when Jack Ma resigned. “This school is famous because of Jack Ma, not because of itself,” – one comment to Forbes . When he is not here, it is difficult for Hupan to attract new students. In fact, the school had to postpone their latest course.

Huarong came to power?

At the end of May 2021, the authorities licensed Jack Ma’s Ant Group to open a new financial company, taking over Ant’s biggest profit segment – the consumer lending company.

Ant will contribute capital up to USD 155 billion, but only own 50% of the shares of the new company – Chongqing Ant Consumer Finance (Ant Chongqing Consumer Finance Company). The other half is held by a number of new partners – including a battery company, a surveillance camera company, and a bank founded in 1990.

But the most remarkable thing is that among the shareholders running the company is Huarong – a “notorious” bad debt management company of the Chinese financial market. Huarong holds a 4.99% stake in Chongqing Ant.

Huarong was established in 1990 to manage bad debt. Since then, it has been flooded with debts that do not know when to pay. It then expanded overseas, targeting high-risk deals. Up to this moment, even the Chinese government has not been able to fully grasp what Huarong owns.

Under former CEO Lai Xiaomin (in office until 2018), Huarong even built a scandalous bribery culture, becoming the “evil” in the eyes of the media. Xiaomin in January 2021 was even executed for bribery, embezzlement and many other serious crimes.

Putting a company like Huarong on the board is like a slap in the face to Jack Ma. Sad ending, for the once powerful man.

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Source : Genk