Virendra Pandit
New Delhi: It is unheard of even in a capitalist country that a globally-known businessman fined by the government actually becomes richer as his investors stayed with him. But this has happened recently in China where Jack Ma, founder of Alibaba, became richer by over USD 2.3 billion after the government fined his group for ‘monopolistic’ tendencies with a penalty of USD 2.8 billion.
Apparently, Jack Ma is emerging as the superhero of China’s 800-odd billionaires, and their investors, as a source of inspiration on how to face archaic policies of their Stone Age Communist government.
Jack Ma’s personal net worth climbed over $2.3 billion after a record antitrust fine was imposed on Alibaba Group Holding Ltd. A few days after the fine was imposed, Alibaba even thanked the Chinese regulators!
“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance, and support from all of our constituencies have been crucial to our development,” the company said in an open letter, according to media reports.
Technically, the penalty imposed on the Group may have marked the end of the antitrust probe against the company, at least for the time being. It has also brought relief to Alibaba’s investors and founder Jack Ma.
But the fine print is: a determined billionaire can get away with criticizing government policies. That is exactly what Jack Ma did in October 2020 when he condemned the country’s archaic financial laws. This angered the Communist Government led by Xi Jinping, President-for-Life.
Beijing then dug out dirt on Jack Ma, stopped his company’s USD 35 billion—the world’s biggest—a few hours before it went public in November 2020, and imposed restrictions. Ma himself was not seen in public for months thereafter and his investors were worried about his well-being. Other billionaires also awaited his fate with bated breath in a notorious country where dissenters simply disappear without leaving a trace—for instance, citizen journalists and whistle-blowers who reported facts about Covid-19 in China in 2020.
Facing global opprobrium and potential flight of capital, in the midst of a slowdown in the economy due to the pandemic and a resurgence of Covid-19 in many countries, China apparently decided to buy peace with Jack Ma with a symbolic penalty against a man whose personal net worth is many times more than the fine imposed.
Alibaba’s American depository receipts soared 9.3 percent on Monday in New York, in what was the biggest jump in four years. Soon after the development, Jack Ma’s personal net worth jumped USD 2.3 billion to USD 52.1 billion on the Bloomberg Billionaires Index, media reported.
Some investors had feared that the penalty imposed on Alibaba would be much more than USD 2.8 billion. The fine is based on only four percent of the company’s 2019 domestic sales, much lesser than the maximum 10 percent under Chinese law.
Meanwhile, China’s central bank has now ordered Ant Group to become a financial holding company that will be regulated like a bank. The move was announced on Monday and is likely to have implications on the growth of the firm.