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China’s Jack Ma’s net worth has dropped $12 billion since October, when China’s regulators began implementing new rules for the fintech industry.
The 56-year-old Ma’s stake in Alibaba and his many other ventures took his wealth to about $62 billion this year in October, setting him on track to become the richest man in Asia. But he has since dropped to 25th on the Bloomberg billionaires index, which tracks the 500 wealthiest people in the world.
His net worth currently stands at $50.9 billion, according to the index.
Regulators in October implemented new rules for the financial technology industry and online lenders, directly impacting the lucrative lending and credit business for Ma’s Ant Group.
The rules are aimed at preventing monopolistic behavior by the country’s large internet firms.Officials said there were “major issues” with Ant’s planned IPO under the new rules, leading to its suspension.
Over the weekend, Chinese regulators ordered Ant Group to revamp parts of its business and “return to its payment origins,” multiple outlets reported. Regulators met with company executives, instructing the firm to rectify its “illegal” financial services, such as its lucrative online lending business.
Ant’s consumer lending unit, wealth management services, and other profitable businesses will soon form a separate financial holding company regulated by the People’s Bank of China.
Under the new structure, the fintech would be subject to further capital restrictions that may suppress its ability to expand at the rate it has been in the past few years.
Furthermore, China is seeking to potentially secure a larger stake in Ma’s businesses than he himself owns, according to the Wall street journal. The billionaire is the controlling shareholder of Ant, while Alibaba holds a rough 33% non-controlling share in the group.
Pan Gongsheng, a deputy governor at China’s central bank, said Ant had become indifferent to China’s regulations, accusing the fintech of “turning a blind eye to compliance requirements,” reports said.
Although Ant has transformed its business multiple times in accordance with regulatory oversight, the central bank deputy governor said this weekend that it “must integrate its development into the overall plan of the country’s development.”
China’s order comes after Ma suggested giving up parts of Ant to the Chinese government. “You can take any of the platforms Ant has, as long as the country needs it,” the billionaire told regulators at a November 2 meeting, according to reports.
But his offer failed to win acceptance, as China was unwilling to give up on a full crackdown.
Alibaba’s shares have fallen by almost 23% since regulators pulled down Alibaba affiliate Ant’s IPO plans.
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