Photographer: Marlene Awaad / Bloomberg
Photographer: Marlene Awaad / Bloomberg
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China has just imposed a record fine on the antitrust amount on Alibaba Group Holding Ltd. The company thanked the government and investors breathed a sigh of relief.
Alibaba’s US deposit certificates climbed 9.3% in New York on Monday, their biggest jump in nearly four years. For Jack Ma, the founder of the e-commerce giant, this meant that his fortune increased by $ 2.3 billion to $ 52.1 billion, according to the Bloomberg Billionaires Index.
The $ 2.8 billion fine is less severe than some investors feared, and is based on only 4% of the company’s domestic sales in 2019, far less than the maximum 10% allowed under Chinese law. While the internet giant has to adjust the way it does business, its vice-president said regulators will not institute a drastic overhaul of its e-commerce strategy, and its CEO has declared Alibaba ready.
“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support of all our constituencies has been crucial to our development,” the company said in an open letter. “We are full of gratitude and respect for this.”
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Ma, who until last year was the richest person in China, has lost billions since his country’s regulators launched an anti-monopoly campaign, halting the initial public offering of his Ant Group Co. payment company, just two days before it would be published. He is now China’s third richest person after Zhong Shanshan of bottled water company Nongfu Spring Co. and Pony Ma from Tencent Holdings Ltd.
Separately, China’s central bank Ant has ordered to become a financial holding company that will be regulated more like a bank. The move, announced Monday, will have far-reaching consequences for the company’s growth and its ability to continue with an initial public offering. Alibaba shares opened 3.4% higher in Hong Kong on Tuesday.
– With help by Coco Liu
(Updates to include ant refurbishment and stock move in last paragraph)