Alibaba shares fall after Beijing Ant heats up

Shares in Alibaba, the e-commerce group founded by Jack Ma, fell sharply after Beijing publicly accused its payment arm in the latest salvo against one of China’s richest men.

The comments of Pan Gongsheng, vice-governor of the People’s Bank of China, were published on the central bank’s website on Sunday and come because the country’s authorities are putting pressure on Mr. Mom’s business empire has increased.

Alibaba’s share fell to 7.3 percent in early trading in Hong Kong, reaching its lowest level since July. The PBoC reprimand overshadowed Alibaba on Monday to increase its two-year repurchase program from $ 6 billion to $ 10 billion.

The company’s shares have fallen more than 25 percent since the end of October – about $ 260 billion of Alibaba’s market capitalization – when Ma Ma publicly criticized the country’s financial regulators and state banks. The personal fortune of mr. Mom, once China’s richest person, has tumbled from just under $ 62 billion to $ 49.3 billion, according to Bloomberg data.

$ 300 billion

Proposed minimum valuation of Ant Group before the outstanding exchange

Beijing also halted an initial $ 37 billion public offering by Ant Group, Alibaba’s online financing unit, following remarks by Mr. This has caused a cascade of public, state media and government criticism of the two companies’ alleged monopolistic practices.

China’s market regulator announced last week that it would launch an antitrust inquiry into Alibaba, while Ant confirmed it had been summoned to a meeting with the PBoC and three other regulators.

Pan’s comments, posted a day after PBoC and Ant representatives met in Beijing, drew investors’ attention back to the financial services group. Ant tried to restructure his business in an attempt to restart his wallet next year.

The attack of mr. However, Pan confirmed how daunting a task is. He said Ant would ‘have to return to its origins’ as a payment services provider and ‘correct’ many of its fastest growing and most profitable consumer credit and wealth management operations. Ant has started the process over the past few weeks, but investors expect it to fetch the company’s valuation if it can return to the market.

Ant’s IPO would have been the largest in the world and would have valued the company at more than $ 300 billion.

Analysts are unsure whether a restructuring will satisfy regulators, or whether Ant will have to sell or close part of its consumer credit operations. The latter provoked fierce criticism from state-owned banks claiming that Ant benefited from weakened supervisory regulations.

The parallel move against Alibaba, which is listed in Hong Kong and New York, further increased interest in Mr. Ma, who established the group more than two decades ago in Hangzhou, the capital of Zhejiang province in eastern China.

After the State Administration of Market Regulation announced its Alibaba investigation on December 24, Zhejiang officials confirmed that they had conducted interviews with company staff and taken material from the group’s headquarters. Zhejiang Governor Zheng Shanjie said on Friday that the inquiry was not intended to usher in a “winter” for online companies, but rather a new “starting point” for the development of the sector.

Additional reporting by Xinning Liu and Ryan McMorrow in Beijing

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