Beijing Tempers Jack Ma

Ma's ambition to have the world's largest IPO was deflated

 

Ant Financial is refunding investors who had applied for the record US$39.67 billion IPO after the offering was suspended yesterday. The dual Shanghai and Hong Kong listing, which would have been the world's largest IPO was suspended less than 48 hours before listing because it may not meet listing and disclosure requirements due to changes in the regulatory environment in China.

Ant Financial focuses on small lenders

It's a shocking development for Ant Financial and founder Jack Ma Yun, and one he could not salvage. But it also shows Beijing doesn't want anyone to get bigger or more powerful than the Communist Party and is doing this to temper Ma.

"The party is flexing its muscle," said Victor Shih, associate professor at UC San Diego. "It's saying to Jack Ma, you are going to have the biggest IPO in the world, but that's not a big deal for the CCP, which overseas the world's second-largest economy."

For foreign investors, Bloomberg says the incident raises questions over the viability of Shanghai and Hong Kong as premium financial centres. The suspension of the IPO comes after Chinese President Xi Jinping said China would open up to allow more foreign access and gradually relax controls over the yuan and capital flows.

Maybe "gradual" means glacial gradual.

Xi said China will open up to foreign markets

The conflicting signals will make foreign investors question China's commitment to greater transparency that is needed in modern, open markets.

But there is also the problem of regulating an innovative hi-tech banking giant Ant Financial. 

Ma, who owns 50.5 percent of Ant Financial has said traditional lenders are run like "pawn shops", as banks always demand collateral before lending. In the future, he said, lending decisions should be decided by big data analysis.

Currently it allows people to pay for goods using Alipay, but it can also help clients, particularly small businesses get access to small loans. Ant's strategy is to earn fees by providing a digital platform for banks to reach small borrowers, and more accurately assess the credit risk.  

But perhaps this concept is too risky -- and it does sound risky -- for Beijing. 

Xiao Jianhua was kidnapped from HK in 2017

As a result Ma was summoned to Beijing on Monday for a rare meeting, and the IPO suspended the following day.

Ant Financial is not the first company to be tempered by Beijing. There are numerous previous examples such as Anbang Insurance Group, HNA Group, Tomorrrow Holding (where the founder was kidnapped from the Four Seasons Hong Kong in 2017), and China Evergrande Group.

Will Ma recover from this? He will have to surrender and lick his wounds, but perhaps Ant Financial is too far ahead of its time. Ma may have to bide his time and keep his head down for a while...

Press Freedom Under Attack Again

Bao Choy speaks to reporters after being released on bail

 

On the first anniversary of the July 21 attacks in Yuen Long last year, RTHK released a comprehensive documentary called "7.21 Who Owns the Truth" broadcast on Hong Kong Connection, which criticized the police for taking so long to respond to passengers in the MTR station who were being attacked by men in white shirts. 

At least 45 people were injured in the 7.21 attack

The emergency line was flooded with calls about the incident, but it took at least 39 minutes for the police to respond. At least 45 people were injured. 

The police have since revised its version of the story that it took only 18 minutes for the police to arrive at the scene, but there is so much footage to prove otherwise.

Nevertheless, in order to conduct research on the documentary, there was footage of vehicles carrying assailants to the station, and award-winning journalist Bao Choy Yuk-ling made a public records search to find out the ownership of these vehicles.

The documentary claims the vehicles were owned by village heads in the neighbourhood, but the owners contacted refused to go on the record.

Choy was arrested at home in Mei Foo

While being allowed to search for the information is not illegal, the police claim she knowingly made a false statement when requesting the information.

So Choy was arrested this afternoon for two counts of making false statements through a vehicle registration search.

The shocking thing is that many journalists have made requests for vehicle registration information before. Not only for vehicles but company registration and land ownership. This kind of information is publicly available; one only has to fill in the paperwork, pay a fee to have the request processed.

She did what any other journalist would have done to investigate the July 21 incident last year.

The police searched her home in Mei Foo and released her on bail this evening. She is scheduled to appear in Fanling Court next Tuesday. 

The doc asked why police took so long to respond

Speaking to reporters tonight, Choy said: "This case concerns me as a reporter, RTHK, and how every other journalist in town is going to report news in the future.

"At this moment I would like to urge all journalists to stand fast to our values and carry on our work with no fear and no favour. Throughout all my years of work, I have been following journalistic principles strictly."

While she refused to comment directly on her case, Choy said it does not serve the public interest when the police operation raises concerns and worries among journalists and the public.

RTHK has been under a lot of heat this year -- but mostly because it does good work and its critics are not pleased.

In March it was raked over the coals for asking WHO health official Bruce Aylward about reconsidering Taiwan's membership in the UN body. He claimed not to hear the question and then abruptly ended the video call.

Headliners frequently made fun of the police

Then the broadcaster shut down Headliner, a long-running satirical show that frequently mocked the police, and reopened an investigation into complaints of sharp reporter Nabela Qoser, who is known for her pointed questions at senior government officials. 

Before Choy was released on bail, the director of broadcasting at RTHK, Leung Ka-wing, RTHK is "afraid" and "worried" but will not alter its editorial principles or stop investigative reporting over the arrest of one of the station's TV producers.

When asked if RTHK would put a hold on any ongoing investigative reporting, Leung replied, "Why should we stop?"

"I would ask you why there be a need to stop? I cannot casually ask people to stop (working on something). There's always a reason when it comes to a pause in work, isn't there? If your boss asks you not to touch a certain issue, you would ask about the reason behind this," he said.

Leung says RTHK will continue its work

We shall find out soon enough what is going on with Choy's case. But it is definitely a massive assault on press freedom in Hong Kong. If reporters cannot be allowed to find basic information on public record, then the city's reputation for its free-flow of information will be greatly impacted.

And by the way shouldn't the police look into a Ta Kung Pao report of its reporter allegedly being followed by someone in a vehicle? Maybe that will keep them busy for a while... 

 

Worries of Surge in Post-Halloween Cases

People were partying in various "masks" for Halloween...

On Halloween night there were lots of people out on the streets, particularly in Lan Kwai Fong, and Secretary for Health Sophia Chan Siu-chee was worried looking at the footage that the large groups of people may lead to a spike in coronavirus infections.

But it was the government that eased restrictions just in time for Halloween... we may find out if there really is a surge in positive cases in the next two weeks.

A positive case was in Mongkok Police station

However there are other local infections to worry about, including a  26-year-old man who works for Cable TV and stayed in a holiday hotel in Mui Wo on Lantau with friends, and a 42-year-old mainland woman who was allegedly a prostitute arrested in a vice operation and the origins of her infection are unknown.

She came into contact with at least 23 officers as she was arrested in a hotel in Mongkok, then transferred to Mongkok Police Station for three days before she was moved to Castle Peak Bay Immigration Centre, then finally Ma Tau Kok Detention Centre.

It's interesting that anyone arrested these days is not tested for Covid-19 right away. So far four officers are in quarantine, and the police station was disinfected. While she was in detention, she shared a cell with six others; luckily they have all tested negative.

Another case stayed at this hotel in Mui Wo

Meanwhile the man shared a hotpot meal with 10 people at a friend's home, seven of them also worked at Cable TV. A woman who stayed with him in the holiday hotel in Silvermine Bay also tested positive along with a 15-year-old related to her.

While the number of daily local infections is less than five, it is apparently not low enough for the mainland to be confident enough to open the border with Hong Kong. 

A commentary in People's Daily on Saturday used Macau as an example, and said the borders were reopened after the casino hub had the virus under control.

"The top priority for Hong Kong is to effectively control the epidemic, strictly prevent cases from rebounding, and stamp out local infections," the commentary said.

It said the central government had supported Hong Kong by sending a team of medical staff to help with the city's mass testing program in September.

As I blogged earlier, China doesn't even count its positive cases according to everyone else's definition; it only counts positive cases as ones with symptoms and not the asymptomatic ones according to the WHO standard. 

Restaurants like Caprice are easier to book now

But that's fine if the mainland doesn't want to reopen the border with us.

Many Hongkongers are very happy to get reservations at Michelin-starred restaurants more easily and malls are much less crowded, along with public transportation.

That's the one upside of living in a pandemic...

 

Seven Lawmakers Arrested For Legco Disruption

Legco descended into chaos on May 8, seven arrested today

 

Seven pan-democratic lawmakers were arrested this morning and charged with suspicion of contempt and interference with Legislative Council officers on May 8.

They are accused of disrupting Legco's House Committee meeting that day that descended into chaos. 

The House Committee is responsible for scrutinizing government bills before they are put to a vote in the legislature, and it had failed to elect a new chairman.

Opposition lawmaker Dennis Kwok Wing-hang was presiding over the meetings and was accused of deliberately delaying the election of a chair to block the passage of laws the opposition disagreed on, one of which was the national anthem bill.

Starry Lee was surrounded by guards

After two Beijing agencies publicly slammed Kwok for filibustering, the pro-establishment camp moved to take control of the committee.

Pro-establishment leader Starry Lee Wai-king, surrounded by Legco security guards, managed to occupy the chairman's seat and the guards (colluding with the pro-establishment camp), made it impossible for the pan-democrats to get close to her. At one point Eddie Chu Hoi-dick climbed the wall behind the podium to get closer to her.

Lee then took control of the committee and began clearing a backlog of bills to review, much to the surprise of pan-democrats, who accused her of abusing her power.

During the melee, pro-Beijing lawmaker Kwok Wai-keung dragged pan-democrat Raymond Chan Chi-chuen several metres on the floor by his shirt -- but Kwok was not arrested for this in this morning's police roundup.

Chan being dragged by Kwok in Legco

When reporters asked why Kwok Wai-keung was not arrested, the police replied they are seeking legal advice from the Department of Justice.

There are so many video clips showing Kwok Wai-keung physically harming Chan, and yet it is the victim who is arrested.

This afternoon the pan-democrats released a joint statement, strongly condemning the Hong Kong government for "arbitrary arrests and suppression of lawmakers and the people's rights of resistance".

"The Legco ordinance was originally intended to protect lawmakers. It is ridiculous that it is now being misused by the authoritarian government as a legal weapon of oppression... We demand the unconditional and immediate release of all democrats."

The pan-democrats held a press conference in the early evening. Democratic Party lawmaker Andrew Wan Siu-kin said it was absurd that officers had to search his home and take him away early this morning.

"The parties that showed the most contempt towards Legco were loyalists and the government," he said. "Many pro-establishment colleagues broke the law during the meeting... I was injured, police said they would investigate, but now I'm arrested -- the plaintiff has become the defendant."

However, Kwok Wai-keung, who dragged Chan on May 8, said police were only doing their job.

Chu (top right) tried to get closer to Lee

"The opposition camp thought that there would be no consequence to what they did. But the legislature was just too chaotic. Police needed to make things right," he said.

Those charged are Democratic Party lawmakers Wan, Wu Chi-wai, and Helena Wong Pik-wan; Labour Party chairman Kwok Wing-kin; lawmaker Fernando Cheung Chiu-hung; and former lawmakers Chu and Chan.

Chu and Chan have already stepped down and decided not to participate in the extended year in Legco.  

The arrests are another sign of Beijing and the government weaponizing the law to pick off its opposition and perhaps eventually eliminating all of them.

Maybe that would end the need for elections?!

Hong Kong's institutions are being dismantled during the pandemic, while democratic nations around the world are too busy fighting Covid-19.

Practically everyday a new development changes the city bit by bit. Soon it will be unrecognizable, even to us who live here.