Finance

The Latest Jack Ma ‘Sighting’ – Is It For Real?

  • “To get rich is glorious.” – Deng Xiaoping
  • “Common prosperity is not the prosperity of a few…” – Xi Jinping
  • “Among the richest men in China, few have good endings.” – Jack Ma

“Good Endings?”

David Lesperance is an international tax and immigration advisor, a “Fixer” of sorts – if I can use that term without any negative connotation – an Arranger of Affairs, and specifically, a designer of “good endings” – that is, “backup plans” for high net-worth individuals all around the world who may find themselves on the wrong side of events in their home country, and in need of extraterritorial assistance to secure life, liberty and property.

To illustrate how the need for this sort of service may arise, Lesperance cites an example from the beginning of his career:

  • “In August 1990, I received a desperate phone call from a Kuwaiti client who was in London. Like many wealthy Gulf Nationals, this client was outside of the searing hot Arabian Gulf when Saddam Hussain invaded Kuwait. In order to prevent wealthy Kuwaitis from being blackmailed over their family members who had been captured during the invasion, the US and the UK governments froze Kuwaiti assets in their countries. As a result, my client was in dire financial straits because his family and entourage (nannies, maids, security people etc.) were occupying almost an entire floor of a luxury London hotel….and his credit card was not working and he had no access to his private banking assets.” 

David’s business today involves all aspects of planning for these sorts of contingencies: providing for access to financial assets beyond the reach of a hostile regime, arranging for immigration, residence and citizenship in more favorable venues, and extending the safety net to include family members and others who may be in jeopardy – and along the way incorporating traditional “wealth management” concerns: estate planning, tax planning, appropriate insurance policies (including policies that cover some of the more exotic risks, such as business interruption or kidnapping). David helps his clients make connections with professionals in these various specialties, and provides a value-added bridge across what he calls the “silos” that often impede the development of an effective Plan of this sort – e.g., what he cites as “jurisdictional silos” in the legal profession, which come into play when the client’s needs cross national boundaries:

  • “Most lawyers are only familiar with their own jurisdiction’s rules. US lawyers tend to only know US law. UK lawyers tend to only know UK law…and so on with each jurisdiction.” 

The China Trade in “Events”

As David points out, the world of late has become more “eventful” – or so it seems at least, with Covid and Brexit and trade wars and nuclear proliferation… No Fukuyama-ist “end of history” in sight. (Good for David’s business, at least.)

Much of the turbulence emanates from China. There is Beijing’s recent suppression of crypto-currencies, as well as its broader crackdown on the Chinese tech and finance sectors. There are the overarching geopolitical issues that go under the headings of “Hong Kong” and “Taiwan.” Internationally, there is the “decoupling” of China from the West, with many disruptive ramifications. Domestically in China, there is “Common Prosperity,” which seems to stand for a series of aggressive and repressive campaigns aimed at some of China’s most successful citizens, the billionaire entrepreneurs who have created over the past two decades a true Chinese economic success story (something the CCP was never able to do). In Phase 1, Common Prosperity has de-prospered the Chinese private sector by about $1 trillion in value. Now, however, the innovators are under threat, and are looking for ways to lower their profile. In the past year, the leaders of most of the major Chinese tech companies have “stepped aside” in one way or another. (In at least one case, “stepping aside” has meant execution by firing squad.)

Understandably, then, some of the country’s entrepreneurs have started to take precautionary measures of the sort that Lesperance specializes in.

At the Center of this trend is the man who until a year ago was the richest and the most well-known of all the billionaires: Jack Ma.

The Jack Ma Case

Several of my previous columns have focused on the quasi-disappearance of China’s once-richest man, Jack Ma, the flamboyant progenitor of the Alibaba empire. My conversations with Lesperance have helped me to understand the context of Ma’s sudden eclipse. 

Jack’s story, in super-abbreviated terms (covered in much more detail in previous columns) is as follows:

  • On Oct 1, 2020, Alibaba was the most valuable Chinese company, and one of the top ten most valuable companies in the world, and as noted, Ma himself was the most wealthy Chinese individual
  • Jack was getting ready for the Initial Public Offering of his 2nd company, a spin-off from Alibaba, a spectacularly successful FinTech company, called the Ant Group. Ant in fact was arguably the largest and most dynamic Fintech company in the world. Its IPO was to have been the largest-ever public offering, a huge “first” for China – with a projected valuations that would have set a total value on Jack Ma Inc (Alibaba and Ant together) at something well over a trillion dollars.
  • Five days before the effective date Ma made a speech critical of the traditional Chinese financial sector (whose business Ant was draining away) —
  • Three days later, Beijing canceled the IPO.  The hyper-charismatic, bilingual billionaire, one of the most public personalities China has ever produced, better known to the world outside China than even Xi Jinping himself… has not been “seen in public” since 

This last bullet-point is technically not quite true. There have been a half a dozen bizarre “Jack-sightings” over the past year, as described in another previous column.

  • First, after almost three months of total silence, in January a 43-second video clip of Jack was published online. He is speaking (supposedly) to an unseen group of rural elementary school teachers about the virtues of education (saying nothing about his business, and with no indication of the time or place of the video)
  • This was followed a couple months later by a report (from Bloomberg) that Ma had been “seen” by someone (the source refused to be identified) playing golf (!?) at a resort on Hainan Island
  • There there was a report (by the Financial Times) which reviewed the flight logs of Jack’s personal jet to show that the aircraft (with our without Jack is not specified) has flown around China a few times
  • Strangest of all – Jack shows up in a tiled Zoom-style video-screen, down in the lower left corner, listening to the central speaker – none other than Vladimir Putin (!) chairing a meeting of the Russian Geographical Society (!?) – Ma sits, bored and unacknowledged, for 90 minutes, as a lethally genial Putin holds court. Ma looks like one of the saints arrayed around the central image of the Emperor in a Byzantine mosaic, silent and immobile.
  • Then, a visit to an Alibaba employee “family day” event – reported by a source who also declined to be named (Reuters, the media channel, was said to have “viewed” a photo taken by… someone… Reuters did not publish it, but the South China Morning Post later ran a picture that may have been the one referred to.)

None of these “sightings” establish any fact of significance other than that Jack Ma is apparently still alive. In particular, this most outspoken of CEO’s has nothing important to say. He makes no comments about his would-have-been trillion dollar empire, his disappearance, his own whereabouts. (His companies, and all other official parties reported to be involved – e.g., the Golf resort in Hainan – have refused all comment. His friends have had nothing meaningful to say – see below.) 

The Latest Sightings

On Sept 1, Ma surfaced again. Finally, there are said to be pictures (plural) –

  • “Photographs of Ma visiting several agricultural greenhouses in the eastern Zhejiang province, home to both Alibaba and its fintech affiliate Ant, went viral on Chinese social media.”

Greenhouses? Well, anyway, where are the photographs? I have not been able to find them – but then I don’t subscribe to Chinese social media. Still, there are over 1 Billion smartphones in China. 1 Billion cameras at the ready. Jack Ma is a highly recognizable person, with a distinctive appearance, and presumably the media would express a huge (financial) interest in any photograph of Jack in public, truly at liberty. He has a vast financial following, of course, that would kill (metaphorically speaking) for a word or two from Jack about the companies he created, and in which so many have invested. You’d think that if Jack Ma were truly out and about in Hong Kong, for example, there would be hundreds of snapshots online by now, and some of them would have made it through to Western media channels. 

A stroll in the outside world? (If Hong Kong still counts as such.) That supposedly happened this month. Jack was 

  • “… spotted in Hong Kong… Two highly-placed sources said they saw Ma in the city on October 1… confirmation that he came to Hong Kong amid rumors that he was banned from leaving the country. It is unclear who Ma met with during his time in Hong Kong and whether he has since left the city.” 

So says the Hong Kong Standard. But by now, there is at least some skepticism in the media. The only Western source that ran this story was apparently Reuters. No other Western channels picked it up (as they had with some of the earlier sightings).

The press has realized that there are too many holes in the narrative. The lack of corroboration for all of these stories is striking. No one speaks on the record; no witness is identified; no affiliated organization will comment; no clearly genuine photos appear. David Lesperance put it this way:

  • Poll Question: What chance do you think that the very famous and physically distinctive Mr. Ma would escape being photographed by a single cellphone-carrying passerby when visiting i) a school, and ii) a golf course, and iii) Alibaba headquarters, and iv) wandering around Central Hong Kong?
  1. Possible
  2. Highly Unlikely
  3. No chance on Earth

What It Means

So, what’s going on here? 

The whole thing is transparently insubstantial. The scenarios for these “sightings” are beyond bizarre: rural schoolteachers, agricultural greenhouses, Vladimir Putin’s lair. The testimony from the few “witnesses” who are named is overtly evasive. Ma’s friend and largest Alibaba shareholder, Masayoshi Son of Softbank, tells us that he texted with Ma (or someone with access to Ma’s cellphone) and can assure us that… Jack is learning to paint, and “has sent me a lot of sketches.” (One might think the CEO would pass along rather more pertinent information to his largest shareholder.) And Ma’s long-time business partner, Joe Tsai (Taiwanese born, USA-educated –Yale Law, no less – and owner of the Brooklyn Nets basketball team) – in short, someone who knows American sensibilities well – adds this

  • “Jack’s actually doing very, very well. He’s taken up painting as a hobby, it’s actually pretty good. I think today he just wants to sort of say, ‘Hey, I want to focus on what I really want to spend time on,’ which is all my hobbies…’”

It is all absurd – in fact, the campaign is designed to emphasize the absurdity, in order to underscore the very arbitrariness of Beijing’s arbitrary power.

It is one thing to attack corruption and open criminality (arguably the case with Lai Xiaomin, the unfortunate former CEO of Huarong, now deceased, and many others now in custody). It is a straightforward matter of crime and punishment.  It may be brutal, but at least it is not completely arbitrary. It can call itself the rule-of-law.

But Jack Ma is not accused of a crime. Nor are most of the other Tech leaders now ducking out of sight. The crime-and-punishment logic doesn’t apply, doesn’t logically motivate the behavior Beijing wants. To bring Jack and his ilk into line requires an assertion of just how wanton, even whimsical, Beijing’s authority can become, such that even innocence is no defense. And how better to demonstrate it than this sort of absurdist staging – transparently meaningless and unpredictable sightings, uncorroborated sources, and shamelessly unconvincing explanations. We (in Beijing) don’t even want a rationale. We want everyone – and especially Jack’s peers among the tech billionaires – to see how we can reduce even the famous Jack Ma to a strung-up puppet, dancing as we direct. Yes, go sit now at Putin’s feet, and keep your big mouth shut. We can even make that happen. 

Or, if there is a rationale, it may be as simple as extortion. Jack’s September surfacing (at the greenhouses) was followed a day later by the announcement that Alibaba will “invest” 100 billion yuan ($15.5 billion) in Xi Jinping’s Common Prosperity. (Other giant tech firms like Tencent have quickly kicked in similar amounts.)

It is time to trim the sails, and check the lifeboats. As Lesperance puts it:  

  • “With Chairman Xi’s ‘Common Prosperity’ adding to the anxiety created by the Jack Ma mystery many wealthy Chinese businesspeople are “stress testing” their current Backup Plans. Obviously the Chinese government “plays for keeps,” and the time to find out if you have an effective strategy to protect your family well-being and wealth is NOT after you run afoul of the second Chinese curse: ‘May you come to the attention of the Emperor.’” 

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