Ma’s celebrity friends will cost him extra cash

Billionaire Jack Ma seems unable to move beyond his controversial past. He paid dearly for his open critique of Chinese state-owned banks last October, when weeks later a furious President Xi Jinping personally decided to pull Ant Group Co’s $34 billion initial public offering. In April, his e-commerce giant Alibaba Group Holding Ltd was slapped with a record $2.8 billion fine after an anti-monopoly investigation.
Fun-loving and charismatic, Ma has often courted the limelight and reveled in his high-flying circle of friends in the entertainment industry. Four years ago, for Alibaba’s 18th birthday, he dressed as Michael Jackson and danced to “Billie Jean.” Last September, he livestreamed a duet with pop star Faye Wong. His Alibaba Pictures Group Ltd has invested heavily, spending millions of dollars on private film studios over the years.
That soft spot for attention now comes with a price. As China cracks down on “fan culture,” what the government sees as a toxic obsession with celebrity lifestyles, some of Ma’s glamorous associates and friends are in the crosshairs. Xi’s message of “common prosperity” — replete with warnings against “excessively high income” and exhortations that the rich “return more to society” — has sparked sharper questions about privilege and access. China’s blogosphere is once again sifting through Ant’s ownership structure, asking why only certain people got to be early investors in the country’s most valuable fintech.
The latest celebrity to find herself in trouble is Zhao Wei, a 45-year-old actress who shot to fame in the late 1990s for her role in the hit TV series “My Fair Princess.” Last week, many of the star’s major works were taken down from popular streaming sites such as Tencent Video. In 2017, China banned her from stock trading for five years because of her involvement in a failed takeover bid for a little-known animation company. Zhao, Ma, Alibaba and Ant have all become hot keyword searches on social media in recent days. Acting aside, Zhao is also a wealthy businesswoman who built a fortune through investments including an early stake in Alibaba Pictures in late 2014. In 2015, her husband, Huang Youlong, partnered with Ma on a private equity deal.
Had Ant gone public, Zhao’s family would have become even richer. Zhao’s mother was a shareholder in two private equity firms that managed to invest in Ant as early as 2016, at a valuation of only $60 billion, or 76.3% of Ant’s IPO offer. Those two firms, in turn, were ultimately controlled by Yunfeng Capital, founded by Jack Ma and Target Media’s David Yu, according to Tianyancha, a widely referenced mainland business database. Attempts to contact Zhao and her family on social media went unanswered.
There are other colorful early investors, notably Ma’s friend Qian Fenglei, who stirred up Hong Kong’s tabloids last November when he was stabbed outside the upscale Dynasty Club in Wanchai — a rarity in a city known for its safety — shortly after Ant’s IPO debacle. The billionaire put out a bounty on his attackers, according to local media reports. Just like Zhao’s mother, Qian was a shareholder in three of the five private equity firms associated with Yunfeng and got to invest in Ant early.
Qian was close to Ma. In 2015, he famously paid HK$42.2 million ($5.42 million) for Ma’s debut painting with a well-known Chinese artist. Qian, whose last name means “money” in Chinese, is nicknamed Qian Duoduo, or “a lot of money,” for his generosity at charity sales. Wong’s ex-husband coined the term in 2012.
The Wall Street Journal reported in February that one reason Xi quashed Ant’s IPO last year was the government’s growing unease over its complex ownership structure — and the people who stood to gain the most from the blockbuster listing. Combing through Ant’s prospectus and its long list of investors, many of which are obscure private equity firms, it doesn’t seem like a stretch to expect there may have been some friends-and-family deals.
Ma’s duet with Wong almost feels prescient now: “Can’t escape Taobao’s prison,” he sang, referring to Alibaba’s shopping platform, which consumed his thoughts long after he stepped down as chairman. Nor can the company distance itself from its high-profile founder. The e-commerce giant’s shares are trading at just 16.6 times forward earnings, compared with Amazon.com Inc’s 63.7 times.

—Bloomberg