WSJ "Delay of China's Ant Group IPO is to Check Xi Jinping's Political Rivals" (Comprehensive)

Ant Group Major Shareholders Include Xi Jinping's Political Opponents
WSJ "IPO Blocked Over Concerns These Figures Would Benefit"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] It has been claimed that one of the reasons the Chinese government blocked the listing of Alibaba’s fintech affiliate Ant Group last November was to curb potential political rivals of President Xi Jinping.

On the 16th (local time), the Wall Street Journal (WSJ), citing Chinese government officials and experts, reported, "An investigation conducted before Ant Group’s initial public offering (IPO) revealed that individuals who could threaten President Xi’s power extension were included in Ant Group’s governance structure." It implied that the IPO was suddenly halted because these individuals were expected to gain enormous economic benefits if Ant Group went public.

WSJ mentioned political rivals of President Xi who were likely to benefit, including Jiang Zicheng, the grandson of former President Jiang Zemin, and Li Botang, the son-in-law of former Standing Committee member Zha Qinglin, a close aide of former President Jiang.

These individuals were found to indirectly own Ant Group through multiple layers.

Specifically, Jiang Zicheng was revealed to own shares in Ant Group through four layers. His private equity firm, Holding Capital, which he co-founded, invested in Shanghai-based Holding Taoran Investment Company and Chensen Investment Asset Management, which in turn invested in Beijing-based Jingguan Investment Company. This company holds shares in Ant Group. Jingguan Investment Company was among the top 10 shareholders of Ant Group.

Li Botang also indirectly owns shares in Ant Group through multiple layers. Beijing-based Jiaode Investment Group, controlled by Li Botang, owns Tibet-based Hongde Century Investment Company and Puching Qisheng Investment Company, which in turn own Shanghai’s Zongfu Asset Investment Management Center. This Zongfu Investment Company holds shares in Ant Group, creating an indirect shareholding structure for Li Botang.

Additionally, Jack Ma, the founder of Alibaba, reportedly attracted so-called 'strategic investors' by allowing investments from various state institutions to evade financial regulators. In fact, state-owned financial institutions such as the China National Pension Fund and China Investment Corporation are shareholders of Ant Group.

WSJ stated, "Through attracting these strategic investors, Ant Group was able to easily pass the strict preliminary listing review ahead of its IPO last year," adding, "The listing review was actually passed within a month."

Since taking power in 2012, President Xi has consolidated his power base by excluding associates of former President Jiang from various power institutions, including the Standing Committee of the Central Political Bureau.

Meanwhile, Jack Ma, who leads Ant Group, made critical remarks about financial authorities ahead of Ant Group’s IPO push last November, after which the IPO was suddenly postponed. Subsequently, the Chinese government demanded that Ant Group convert into a financial holding company subject to strict regulatory supervision. Ant Group recently submitted a business restructuring plan centered on this holding company conversion and received approval from the authorities.

This content was produced with the assistance of AI translation services.