Jack Ma, the founder of Chinese tech giants Ant Group and Alibaba, hasn’t made a public appearance since October.
Ma’s disappearance from the public eye has struck many as unusual, especially in the wake of an abruptly suspended IPO for Ant Group, which would have been the world’s largest initial public offering, at $37 billion, if it had gone through. Just before the IPO suspension by Chinese regulators, Ma gave a speech at a finance summit criticizing them, a move that was largely considered bad PR. Since then, he’s been laying low.
According to venture capitalist and co-host of the Tech Buzz China podcast Rui Ma, Jack Ma’s disappearance isn’t cause for alarm, at least for Chinese investors.
“There are obviously two divergent outcomes,” Ma said. “One is the worst case scenario, that he is not okay, he's going to jail. Or he disappears forever. And I think that definitely would shake the confidence of people like entrepreneurs and investors in China. I think that's very serious. However, I think the more likely scenario is that he's fine, he'll just show up in a couple of months.”
Many of the investors with ties to China have heard of rumors swirling around Jack Ma for years, making this latest round less of a concern. Rui Ma cited Jack Ma’s announcement in September 2019 that he would be stepping down as the chairman of Alibaba's board, which led to rumors that he was fleeing China altogether. One common thread in these rumors, she said, is Ma’s relationship with the Chinese government.
“I find it hard to imagine that he is in some — people joke — re-education tech prison,” Rui Ma said. “No, he's probably laying low, wherever he is, somewhere in his mansions, but he might have been told to not say anything. If I were his corporate or even personal PR, I would tell him not to say anything. This is considered a highly sensitive matter right now.”
While there’s no evidence that China had anything to do with Ma’s disappearance, some have pointed out that Ma’s final public appearance involved a critique of the government’s role in its finance sector, sparking rumors. After Ant Group’s IPO was suspended, China launched an investigation into Alibaba to see whether the company engaged in monopolistic behavior. Meanwhile, regulators are still investigating Ant’s IPO, namely the lending license it obtained.
“Structurally, they were misusing the license, not for what it was intended for,” Rui Ma said. “Their original micro lending license was really for regional businesses to support local businesses. It wasn't really to do a nationwide instant credit line. That really wasn't what it was meant for.”
If anything, regulators were planning on investigating Ant anyway, she says. In recent years, regulators have been slow to look into larger companies in China, but when the world’s biggest IPO was suspended with days to spare before going public, many were surprised that regulators acted at all. According to her, politics could have played a role in the delay.
“I would argue that politics is probably what prevented them from regulating effectively initially,” Ma added. “And now they're doing their job, but how it came down was very ugly, and I don't know how much of that was politics, but I definitely don't think it's a hundred percent politics.”
Whatever the reason, Rui Ma pointed out that investors in the West were more concerned about Jack Ma laying low than those in China. “I don't think it was a big deal,” Rui Ma said. “Again, these headlines are present in Chinese media as well, but it's not reported with alarm.”