[Asia Economy Reporter Kim Suhwan] Chinese authorities have caused the financial company 'Ant Group,' effectively controlled by Alibaba founder Ma Yun, to lose a corporate value ranging from at least $70 billion (approximately 79 trillion KRW) to as much as $205 billion (approximately 231 trillion KRW) since last year.
Analysts suggest that this is due to the comprehensive pressure imposed on Ant Group after Ma Yun publicly criticized Chinese financial authorities, which led to the company falling out of favor with the Chinese government.
On the 24th (local time), Bloomberg News reported that since Chinese authorities abruptly postponed Ant Group's initial public offering (IPO) last November, the company's market capitalization has been declining.
According to Bloomberg, if Ant Group attempts to relaunch its IPO, its market capitalization is expected to range from $115 billion (approximately 130 trillion KRW) to as much as $250 billion (approximately 282 trillion KRW).
Considering that Ant Group's corporate valuation was projected at $320 billion (approximately 361 trillion KRW) at the time of its IPO last year, this means that up to $205 billion in market capitalization has evaporated.
This is why there is an interpretation that even if Ant Group pursues a relisting, it will be difficult to regain its previous corporate value amid regulatory pressure risks.
Previously, Ant Group was preparing for an IPO worth $34.5 billion in the Chinese stock market last November, which was expected to be the largest listing among financial institutions. However, the IPO was abruptly postponed just before the listing date due to pressure from Chinese authorities.
Earlier this year, the Chinese government imposed the largest-ever antitrust fine of 18.228 billion yuan (approximately 3.2 trillion KRW) on Alibaba Group, Ant Group's parent company. As a result, Alibaba recorded an operating loss for the first time since its listing.
Furthermore, Chinese financial authorities applied stringent regulations to Ant Group by granting it the same status as traditional financial companies and subsequently ordered a restructuring. According to Bloomberg, Ant Group is currently reported to be regularly reporting the progress of these directives to the government.
It is also known that the authorities are discussing appointing government officials to Ant Group's executive team.
Due to government pressure, reports have emerged that Ant Group plans to hand over financial information of its one billion users to the government. According to The Wall Street Journal (WSJ), Ant Group is discussing establishing a credit information company with a Chinese state-owned enterprise within the third quarter, with operational control of the joint venture expected to be held by the state-owned enterprise.
The Chinese government intends to control user personal information by securing operational rights over the joint venture.
Previously, Ma Yun publicly criticized the conservative regulatory system of Chinese authorities in October last year. At that time, Ma Yun stated that regulatory authorities were out of control and suppressing innovation.
His public criticism of the Chinese government ultimately led to increased pressure on Ant Group.
As regulations on Ant Group have intensified and impacted its corporate value, employee anxiety is reportedly growing.
Bloomberg reported, "Many employees, including senior executives, are considering leaving," adding, "The decline in Ant Group's corporate value has caused significant anxiety among employees granted stock options."
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