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Ant forced into defence on two fronts: government and staff

Alibaba founder Jack Ma is seen at a conference in Shanghai in Sept 2018. His Ant Group subsidiary now appears entangled in a new and potentially troubling graft scandal. File photo: Reuters.

(ATF) Beijing’s squeeze on Ant Group has put the company and its billionaire founder Jack Ma in a new stand-off with officials and the firm’s employees.

Ant was forced to tell staff it’s working to help them financially after the pulling of the company’s planned IPO last year left workers out of pocket, with promised bonuses from the sale proceeds evaporating.

The Hangzhou-based financial giant also finds itself under renewed pressure from officials for not passing on enough personal customer data to China’s central bank, a key issue that has emerged after the postponement the record $37bn listing in November, according to the Financial Times.   

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Ant Group is seeking to help staff with “short-term liquidity problems”, its executive chairman said in internal messages, after the sale’s abandonment left them without shares to cash in.

The listing of the affiliate of Chinese e-commerce giant Alibaba Group would have made some of the company’s employees millionaires or billionaires.

Eric Jing told employees last week that the company would review its staff incentive programmes and roll out some measures starting from April to help solve their financial problems, according to two people who have seen the messages.

Employee frustration

Some Ant employees recently expressed frustration on social media for not being able to sell the company shares they own after Chinese regulators abruptly halted Ant’s dual-listing, which was set to be the world’s largest, in China and Hong Kong.

Jing made the comments in response to employee questions about Ant’s future on the company’s internal website, said the people, who declined to be named as they were not authorized to speak to the media. 

The Wall Street Journal first reported the news. 

“Our company will certainly become a public company and I’m very confident about it all along,” Jing was cited by the people as saying in the internal messages. “Our preparation work won’t stop.”

Ant is currently working on plans to shift to a financial holding company structure following intense regulatory pressure and to rein in some of its operations and subject them to rules and capital requirements similar to those for banks.

It’s the latest controversy to hit the company founded by Ma. The listing was abandoned after the famous billionaire criticised Chinese regulators and the People’s Bank of China (PBoC), the central bank.

Ma has largely been elusive ever since and unsubstantiated rumours of his death or imprisonment have followed in the event’s wake. 

Ant appears to be resisting PBoC demands that it hand over data. The central bank criticised “inappropriate collection and control of data” by “leading internet platforms that have abused their market monopoly”, according to the FT report.

The PBoC wants loan and other details about Ant’s half-a-billion customers.

  • Reporting by Reuters

Mark McCord

Mark McCord is a financial journalist with more than three decades experience writing and editing at global news wires including Bloomberg and AFP, as well as daily newspapers in Hong Kong, Sydney and Melbourne. He has covered some of the biggest breaking news events in recent years including the Enron scandal, the New York terrorist attacks and the Iraq War. He is based in the UK. You can tweet to Mark at @MarkMcC64371550.


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