Jack Ma is no longer the chairman of Alibaba, but continues to own a big chunk of the company’s share. He is also part of a core group that selects a majority of Alibaba’s board members.
Chinese billionaire and Alibaba Group founder Jack Ma has been at the receiving end of a government crackdown that began targeting the e-commerce giant and its finance affiliate Ant Group last year. Now, the Wall Street Journal has reported that the government has asked Alibaba Group Holding Limited to shed its media assets.
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The company, whose central business is online retail, has stakes in microblogging platform Weibo Corp. (nearly US $3.5 billion) apart from several news outlets such as South China Morning Post, the leading English-language newspaper in Hong Kong. The government is reportedly worried about the tech giant's influence over public opinion, mainly on social media, and hence, wants the media assets to be disposed of.
Why is Jack Ma a threat to the government?
Ma was seen as one of the most inspiring stories of success from China but things took a different turn in 2020. The New York Times reported how the pandemic saw resentment for the rich among the common public in China, this was a phenomenon the ruling party was more than eager to tap into.
Ma came into a collision course with the Chinese government when he launched his successful venture Alipay. In China, finance is mostly state-controlled and Alipay was breaking that structure.
Another reason being Ma’s Alibaba, a tech giant with access to data that can only be compared to Facebook or Google. The Chinese government sees the size of their companies and reach as a threat, the NYT reported added.
Last year, Ma was conspicuously absent from a TV show which he created, fuelling speculations about his whereabouts. Though a statement issued by Alibaba suggested Ma could not be part of the finale judge panel of ‘Africa’s Business Heroes’ “due to a schedule conflict”. It happened at a time when he and his companies were facing a crackdown from Chinese regulators.
What went wrong?
In December last year, Chinese officials had opened an anti-trust investigation into Alibaba, while continuing to circle Ant Group, the fintech giant that Ma had spun out of the powerhouse e-commerce company. Ma is no longer the chairman of Alibaba, but continues to own a big chunk of the company’s share. He is also part of a core group that selects a majority of Alibaba’s board members.
Earlier in November, authorities had quashed Ant's planned blockbuster initial public offering, less than two weeks after Ma accused China’s banks of behaving like “pawnshops”. He had accused the banks of lending only to those who could put up collateral. Ma also castigated financial regulators for being obsessed with minimising risk.
But this wasn’t always the equation. Ma enjoyed good relations with the Chinese government for over two decades. There are several theories about what went wrong. Some experts say that the Alibaba group grew too big and was bound to get the attention of the authorities, others point at Ma’s speech in October at a conference. In that speech, the Alibaba founder had trained his guns on the financial system in the country and criticised the regulators for being shortsighted, Bloomberg reported. Things went south after that and new regulations were soon introduced.
Who is Jack Ma?
The guide-turned-English teacher-turned-internet entrepreneur is China’s richest person. Ma was the first high-profile Chinese person that former US President Donald Trump met after his election in 2016. For Chinese youth and the ambitious, his story was one to emulate.
Ma was born in China’s Hangzhou city in 1964. At a young age, he started working as a guide for foreign tourists.
According to a Forbes report, Ma would ride his bicycle for 40 minutes every morning at 5 o’clock to an international hotel for tourists. He would approach them and ask them to teach him English instead of giving money after he showed them around the city.
Later, Ma attended Hangzhou Teacher’s Institute (now Hangzhou Normal University) and graduated with a bachelor’s degree in English in 1988.
According to a Bloomberg video, he applied for 30 jobs but got rejected every time. He then got a job at a local university where he taught English and earned $15 per month. He separately began a translation company with some of his friends.
Ma witnessed the potential of the internet for the first time during a US trip in 1995. After a failed attempt at China Pages, a yellow pages website, he helped set up a website for a government agency in Beijing. He is synonymous with success.
He, along with his wife and a group of friends, founded Alibaba in 1999. He continued raising funds and expanded the company initially launched as an online B2B marketplace.
In 2014, the company raised $25 billion in the world’s biggest IPO and was listed on the New York Stock Exchange. Ma’s personal wealth is pegged at more than $50 billion. According to the Bloomberg Billionaires Index, he is the 25th richest person in the world.
Lately, public sentiment has soured, and Daddy Ma, as he is known over the internet, has become the man people in China love to hate.
First Published: Mar 17, 2021 6:05 PM IST