Jack Ma, chairman of Alibaba Group arrives at the "Tech for Good" Summit in Paris, France May 15, 2019. REUTERS/Charles Platiau
By Lulu Yilun Chen and Abhishek Vishnoi
(Bloomberg) —Jack Ma is taking a weeks-long tour in Europe after largely disappearing from public view for almost two years, adding to signs that China’s government is easing pressure on the entrepreneur as he steps back from a business empire that had made him one of the country’s most powerful people.
The 57-year-old co-founder of Alibaba Group Holding Ltd. has popped up at restaurants in Austria, toured a university in the Netherlands to learn about sustainable agriculture and docked his yacht off the Spanish island of Mallorca, according to reporting by Bloomberg and local media.
While it’s not Ma’s first trip outside China since he criticised Communist Party officials in 2020 over regulation of his fintech giant Ant Group Co., it’s a stark change from the days when the billionaire was being advised by the government to not leave the country. In one sign of how skittish investors had been about the tycoon’s fate as recently as two months ago, Alibaba shares briefly lost US$26 billion after a state media report that authorities had imposed curbs on a person surnamed Ma. Subsequent information made clear the report was referring to someone else.
Ma has had to make significant concessions to get out of the government dog house. After regulators torpedoed Ant’s hotly anticipated initial public offering in 2020, the company overhauled operations to comply with tighter controls and have discussed regularly with the country’s central bank how to “rectify” operations. In its early years, Ant’s success in services like digital payments and money market deposits threatened the dominance of major state-backed banks.
Ant has also verbally signalled to regulators that Ma intends to cede his control over the company, according to people familiar with the matter, adding they have conveyed those plans to officials and the central bank for years. One proposal under consideration involves transferring Ma’s shares to other executives so the company can be overseen by a committee, one of the people said.
In a filing this week, Alibaba reiterated that Ma “intends to reduce and thereafter limit his direct and indirect economic interest in Ant Group over time” to a percentage that does not exceed 8.8%. Ma currently holds 50.52% voting rights in Ant.
Jack Ma addressing teachers at an annual event he hosts to recognise rural educators, on 20 Jan. (PHOTO: Bloomberg)
“A significant key man risk will be removed from the neck of Ant” if Ma cedes control, said Justin Tang, the head of Asian research at United First Partners.
Representatives from Ant, Alibaba and Ma’s foundation didn’t immediately respond to requests for comment. China’s central bank didn’t respond to a faxed request for comment.
The Wall Street Journal reported earlier that Ant told regulators Ma intends to give up control and could transfer some of his voting power to other top executives. Alibaba’s Hong Kong-listed shares fell 4% as of 9:49 a.m. on Friday.
Ma holds no management titles at Ant and giving up control of the company would cause little disruption for daily operations because he hasn’t been deeply involved for years, people familiar with the matter said, requesting not to be named discussing private information. Ma originally ended up with majority voting control as Ant was separated from Alibaba in a complex transaction aimed at minimising conflicts with China’s regulations.
Ma’s decisions now may be a way to align with President Xi Jinping’s vision of achieving “common prosperity.” His companies are trying to meet the demands of China’s watchdogs, who have pledged to curb the “reckless” expansion of technology firms.
The Communist Party’s evolving stance toward the private sector has become one of the most closely watched developments in global markets in recent years, with some observers going as far as to call China’s sprawling internet sector uninvestable.
Even before Ma drew the ire of Chinese regulators, he had been distancing himself from the twin empires of e-commerce giant Alibaba and Ant. Ma stepped down as CEO of Alibaba in 2013 and then as chairman in 2019. He said as early as in 2014 he intended to reduce his stake in Ant to no more than 8.8% and he intends to donate 611 million shares to charity.
The ownership changes could delay the revival of Ant’s much anticipated IPO. China’s securities regulations state that companies can’t list on the A-share market if the controlling shareholder has changed in the past three years. The Nasdaq-like STAR market has a two-year waiting time, while Hong Kong’s is one year.
“While there will be a waiting period for Ant with this change, it will make little difference as the weak markets will mean that Ant is in no rush to be listed,” Tang said.
Ant is currently waiting for the central bank to agree to review its application for a financial holding license, a key step for the company to move forward for any chances of going public.
Once valued at US$300 billion, Ant’s projected worth has plummeted after regulators curbed operations at the company’s most profitable units including consumer lending. Bloomberg Intelligence analyst Francis Chan estimated in June that Ant is worth about US$64 billion.
As part of Ant’s restructuring, the company has ramped up its capital base to 35 billion yuan (US$5.2 billion) and has moved to build firewalls in an ecosystem that once allowed it to direct traffic from payment platform Alipay, with a billion users, to services like wealth management and consumer lending.
Assets under management at its proprietary money-market fund Yu’ebao — once the world’s largest — dropped about 35% from a peak in March 2020 to 813 billion yuan as of June.
While Ant said in June it has no plans to initiate an IPO, the company’s Chairman Eric Jing said last year that it would eventually go public.
“Jack Ma was already not holding any title in Alibaba. I don’t see this having a major impact on the company’s operations,” said Jian Shi Cortesi, investment director at GAM Investment Management in Zurich. But it will lead “investors to focus more on the company’s development rather than focusing on Jack Ma.”
—With assistance from Dong Cao, Henry Ren, Colum Murphy, Yiqin Shen, Zheng Li and Coco Liu.
HONG KONG: Macao will reopen public services and entertainment facilities, and allow dining-in at restaurants from Tuesday (Aug 2), authorities said, as the world's biggest gambling hub seeks a return to normalcy after finding no COVID-19 cases for nine straight days.
Beauty salons, fitness centres, and bars too will be allowed to resume operations, the government said in a statement on Monday. The announcement came as authorities also reported on Monday that July monthly casino revenues dropped 95 per cent year on year to 0.4 billion patacas (US$49.5 million), the lowest on record.
Casinos were closed for 12 days in July, reopening on Jul 23 as authorities began unwinding stringent measures which required most businesses and premises to shut.
The former Portuguese colony has reported around 1,800 infections since mid-June when it was hit with its worst coronavirus outbreak that forced the closure of casinos and locked down most of the city.
Despite reopening, there is likely to be no business for at least a few weeks, analysts said, due to strict restrictions still in place.
Health authorities will require residents to wear masks when they go out and must show a negative coronavirus test within three days to enter most venues.
"There have been no community infection cases in Macao for nine consecutive days ... and the risk of the spread of the coronavirus has been greatly reduced," it said.
This is the first time Macao has had to grapple with the fast spreading Omicron variant.
More than 90 per cent of Macao's residents are fully vaccinated against COVID-19 but authorities have closely followed China's zero-COVID mandate which seeks to curb all outbreaks at almost any cost, contrary to the rest of the world which is already living with the virus.
The city only has one public hospital which was already overburdened even before the pandemic.
Sands China, Wynn Macau, MGM China, Galaxy Entertainment, SJM Holdings and Melco Resorts are the current six casino licence holders in Macao. Their licences will expire by the end of the year.
They are soaking up losses as they prepare to bid for new licences in a business that generated US$36 billion in revenue in 2019, the last year before COVID-19 curbs slammed the sector.
Firms CNA spoke to also said that pickings for talent are slim, noting that fewer architecture students move on to do their master's degree, which is typically needed to practice architecture in Singapore.
“They also realise that they’ve got so many years of studying, and then when they come out, they feel that in terms of job satisfaction, pay and hours, it’s just not worth the effort,” said Mr Siew.
“I think a lot of them are making early exit decisions, so it’s quite worrying and quite sad.”
In a survey last August by the Singapore Institute of Architects, only 7 per cent of young graduates said they were likely to stay in the profession in the long run.
Student intake for the Architecture and Sustainable Design programme at the Singapore University of Technology and Design (SUTD) has “remained stable”, said the university’s spokesperson.
“We have not experienced a significant decline in numbers. Our ASD (Architecture and Sustainable Design) undergraduates and Master of Architecture graduates still choose the architecture profession predominantly,” the spokesperson said.
“A small number has ventured into affiliated design industries such as experience design, exhibition design and digital solutions providers in the built environment sector.”
The programme has a “stringent selection process” and “close-knit study environment”, and students are coached and mentored to “keep on course” for graduation, the SUTD spokesperson said.
Intake for architecture students at the National University of Singapore (NUS) has similarly “remained fairly stable over the years”, said a spokesperson for its College of Design and Engineering.
The curriculum trains students in skills that are relevant to a “broad variety” of careers. Students in NUS’ most recent batch of architecture students had an employment rate of 97.7 per cent, with “competitive” median starting salaries at S$4,000, the spokesperson said.
“Whilst not all of our graduates go on to work as architects, our curriculum’s focus on design excellence ensures that those who do choose to explore other fields find success in related careers,” said the NUS spokesperson.
Architecture graduate Chua Sheng Chuan told CNA that of the 150 students in his batch, only about 20 of them are architects now, five years after graduation.
Mr Chua, who set up his own timber construction firm Calvary Carpentry, said he decided not to take his master's degree despite interning at several architecture firms.
“If you ask me – do I want to reach the stage where I become an architect? Yeah, I think every one of us still has that little dream within them. But it’s just that the process to get there is so hard,” the 31-year-old said.
“I think every single architecture student ... wants to see their ideas become a reality without all the trouble in between.”
Architecture firms should be part of a larger group pushing for “more positive changes” in the professional sector, said Mr Seah.
“There's still a lot we can do to make it a lot more attractive in terms of prospects, opportunities. Remuneration for architects, not just young but especially for our talents,” he added.
“The subject of talent retention is very critical, because the draining part is not obvious when it starts. And it’ll be very evident (after that) but by then it’s already too late.
“It’s timely not just from a firm’s perspective but from an entire profession and sector, we look at this issue deeply ... and really induce some positive change.”
