Chinese billionaire criminal secretly profited from Jack Ma’s deals

By Liam On Jul 21, 2024

2 min read Last updated: July 22, 2024 | 01:28 AM IST

By Michael Forsythe, Katrina Northrop and Eliot Chen

Four years ago, Jack Ma was the embodiment of China’s spectacular economic rise. Already the country’s richest and most famous businessman, he was on the verge of becoming one of the world’s richest.

The expected IPO of Ma’s fintech company, Ant Group, was expected to surpass the record-breaking launch of his e-commerce giant Alibaba. He would soon, it was thought, be as revered as Bill Gates and Steve Jobs — a paragon of Western business in China.

At the same time, another wealthy Chinese businessman faced a very different fate. Xiao Jianhua was being held on bribery and corruption charges—a larger-than-life target of a government crackdown on corruption. Xiao had made a fortune by manipulating markets and cultivating close ties with relatives of top Chinese officials, and he was about to become an example.

And yet, behind the scenes, these pillars of Chinese capitalism — its most celebrated and notorious billionaires — were connected to each other through investments worth at least $1 billion, an investigation by The New York Times and The Wire China found.

A review of more than 2,000 confidential documents shows that Xiao’s now-dismantled company Tomorrow Group secretly secured lucrative stakes in a string of Ma’s companies over a five-year period. These business associations were never disclosed, and a former senior executive at Tomorrow Group said: “To the best of our knowledge, Jack Ma was not aware of it.”

The deals offer a close-up view of China’s distinctive brand of capitalism, where well-connected entrepreneurs and those who raise money for them are better off, at least in some cases, without interacting with each other. In almost any other robust economy, the owner of a large company would want to develop a relationship with an investor who raised $1 billion, and the investor would want to have some say in how the money was used.

First print: July 22, 2024 | 01:27 AM IST