Jack Ma’s Disappearance and the Dangers of Doing Business in an Autocracy.
By Frida Ghitis
The last time China’s most famous billionaire, Jack Ma, was seen in public was October. It was an appearance that did not please the regime in Beijing. The founder of e-commerce giant Alibaba—something of a Chinese Jeff Bezos—may have grown too confident and too powerful for the Chinese Communist Party, which may have decided it was time to not just silence him and limit his power, but to send a message to other potential critics with wealth and influence.
It would not be the first time that China has used repressive tactics to put elites in their place. And it wouldn’t be the first time a repressive regime has used mafia tactics to bring people who have gotten too wealthy, too influential—and perhaps too comfortable—to heel. We have seen it in recent years in Russia, Saudi Arabia and elsewhere.
Ma last spoke publicly at the Bund Summit, a financial conference, in Shanghai on Oct. 24. Before an audience that included Chinese government officials, he talked about the planned stock listing of his massive Ant Group, which would have been the largest not just in China’s history, but “the largest in human history,” he said. But Ma also criticized China, saying the banking system operates with a “pawnshop” mentality, with outdated demands for collateral and guarantees for loans.
That call for banking reform sounds like mild stuff to democratic ears, but his troubles started immediately. Within days of the speech, regulators announced that Ant Group’s initial public offering at the Shanghai and Hong Kong stock exchanges had been suspended. Authorities then opened an anti-trust investigation against Alibaba. Ominously, Ma was summoned to be interviewed by the China Securities Regulatory Commission.
It’s unclear what happened to him or where he is. CNBC has reported that he’s “lying low.”
If history is any precedent, Ma may reappear chastened, as have other Chinese billionaire businessmen—put in their place by authorities after going missing for a period of time. Disappearances of Chinese businessmen have become no less sinister for being almost routine. Some come back, but some never do.
Xiao Jianhua, a Chinese-Canadian billionaire, was abducted in 2017 and hasn’t reappeared. Guo Guangchang, an investor sometimes described as the Warren Buffett of China, disappeared for several days in 2015, reappearing later to say he was “assisting in certain investigations” by Chinese authorities. Yim Fung, a securities trading billionaire, was also missing for about a month in 2015.
Many disappearances and a number of untimely deaths have certainly caught the attention of powerful Chinese figures. Most recently, Lin Qi, a 39-year-old video game magnate, was found dead in Shanghai, reportedly poisoned.
It’s impossible to know the perpetrators and the motivations behind each of these incidents. Yet the pattern in China echoes similar shakedowns and disappearances in other authoritarian countries, whose leaders have made it clear to their wealthiest citizens that they can enjoy their prosperity—but the regime can also take it, and their lives, if it deems them a potential threat.
Disappearances of Chinese businessmen have become no less sinister for being almost routine. Some come back, but some never do.
The most notorious and most sinister pattern has been visible in Russia since just after Vladimir Putin assumed the presidency. In 2000, Putin summoned the country’s oligarchs for a warning session, making it clear that they could keep their fortunes— shadily acquired during the crooked privatizations of former Soviet industries in the 1990s—if they cooperated with him. “We received confirmation that the results of privatization won’t be reviewed,” a relieved Mikhail Khodorkovsky, at the time the country’s wealthiest man with a fortune of $15 billion from oil, said after the meeting.
Less than three years later, in 2003, Khodorkovsky dared to complain about growing official corruption during another televised meeting with Putin. Before the end of the year, he was arrested on corruption charges and sent to prison. Tax authorities ransacked his Yukos oil firm, smothering it out of existence. Khodorkovsky spent a decade in a Siberian prison, before leaving Russia for Switzerland, and then London.
Other Russian oligarchs have had to choose between exile and cooperation. Even exiles say they know they are under surveillance from a state machine known to kill on foreign soil. The list of Putin critics who have faced untimely deaths is long, and it includes journalists, politicians and business figures.
Boris Berezovsky, one of the main oligarchs who helped Putin rise to power, but quickly broke with him when he saw his KGB-honed authoritarianism, fled Russia in late 2000 after he was summoned by state prosecutors. He lived in England until 2013, when he was found dead in his bathroom. The official cause of death was suicide. But following an investigation, the coroner declared that he could not fully explain Berezovsky’s death. “I am not saying Mr. Berezovsky took his own life. I am not saying Mr. Berezovsky was unlawfully killed. What I am saying is that the burden of proof sets such a high standard it is impossible for me to say.”
Mysteries surround all of these cases, and that is precisely the point: They are a warning to anyone who would dare stand up to the regime in Beijing or Moscow.
Because their fortunes were made under questionable circumstances, in an environment rife with corruption, business moguls in an autocracy are vulnerable to charges that they have broken the law—but only, it seems, when the authorities decide to enforce it, often for political purposes. It also means that putting that pressure on millionaires and billionaires is often a winning populist move for a leader trying to amass power.
In Saudi Arabia, Crown Prince Mohammed bin Salman steadily consolidated his position as the country’s de facto ruler after his father, King Salman, ascended to the throne in 2015. The most dramatic event in the crown prince’s push to sweep away any challengers and suspected conspirators against him came in 2017, when he launched a dramatic crackdown on the corruption that is rife among the royal family. He rounded up hundreds of prominent Saudi figures, including well-known princes and other royals.
The detainees were held in the Ritz-Carlton in Riyadh, and all but forced to sign over part of their fortunes to the state without the benefit of due process. Government coffers received a huge influx of funds, but the most valuable asset traded was power. The crown prince’s gambit struck fear in the hearts of men who thought they had a say in the political direction of the kingdom, letting them know nothing would stand in the way of his rise.
At the heart of all these moves are ruthless rulers, willing to let people become wealthy under them, but unwilling to tolerate any challenge to their absolute authority. That’s the lesson Jack Ma, if he’s still alive, is likely receiving right now. “You may be very rich, but you’re not as powerful as you thought. Watch your words. Watch yourself.”