Published: July 11, 2023 6:40 am
Author: RT
Ant Group and Alibaba collectively lost more than $850 billion over the past three years, the news outlet reports
Chinese tech giants Ant Group and Alibaba lost billions in value over the past three years amid the regulatory crackdown that followed co-founder Jack Ma’s criticism of the government, Bloomberg reported on Monday, citing calculations based on market data.
Both companies came under scrutiny over alleged violations of anti-monopoly laws. The crackdown came shortly after Ma’s speech in October 2020 in which he criticized China’s financial regulatory system for stifling innovation, and claimed that Chinese banks were operating with a “pawnshop” mentality.
According to the report, fintech giant Ant Group, which operates the popular payments app Alipay, lost 75% of its value, which now stands at around $78.5 billion, down from its valuation of $315 billion in 2020. At the time, it also lost what would have been the largest IPO in history, called off by Beijing amid the regulatory probe.
E-commerce giant Alibaba, also co-founded by Ma, saw a 45%, or $620 billion, drop in market value since 2020.
Collectively, the companies’ valuation plunged by over $856 billion. This also affected Ma’s own net worth, which dropped from around $61 billion in October 2020 to $34.1 billion as of Monday, according to Bloomberg’s Billionaires Index.
During the regulatory probe, Alibaba also faced a record $2.8 billion fine for antitrust abuses and was forced to reorganize its business model. Earlier this year, the company pledged to divide its business into six separate units.
Ant Group was also slapped with a nearly $1 billion fine from China’s central bank earlier this month. Chinese regulators have been pressuring Ant Group to distance itself from both Alibaba and Ma and operate more like a traditional financial organization regulated by the central bank.
READ MORE: Alibaba co-founder Jack Ma steps further away from business
Earlier this year, Ma announced he was giving up controlling rights of the company. In January, Ant pledged to undergo an “adjustment of the upper-tier shareholding structure,” under which Ma was left with only an estimated 6.2% of voting rights. Analysts view the central bank’s fine for Ant as signaling the end of the regulatory crackdown on the business.
“The companies have done their mea culpas and the punishments are over – at least for this series of issues,” Kendra Schaefer, a partner at Beijing-based consultancy Trivium China, told Bloomberg.
For more stories on economy & finance visit RT’s business section
