Alibaba Shares Briefly Plunge On Arrest Report Of Person Named ‘Ma’ In Hangzhou

Alibaba shares plunged as much as 9.4% in Tuesday morning trading in Hong Kong following a report by CCTV that an individual surnamed Ma, which many investors feared to be cofounder Jack Ma, had been detained. The plunge erased $26 billion in market capitalization from the Chinese e-commerce giant before the state broadcaster issued a correction, and shares made a quick recovery to finish the day with a loss of 1.76%.

CCTV’s report stated that a person surnamed Ma was taken in for “criminal coercive measures” in the eastern city of Hangzhou, where Alibaba is headquartered. The person was targeted by Hangzhou police last week, according to the report, under charges of inciting subversion of state power through the internet and conducting other “activities that endangered national security,” pending an ongoing investigation.

While the person’s full name was not disclosed, CCTV suggested the person’s first name was one character–fitting Jack Ma’s first name, “Yun”–prompting speculation from local media outlets in China and Hong Kong that the charges affected the Alibaba Group billionaire.

Alibaba’s share price rebounded after CCTV issued a correction that the person’s first name had two characters. Separately, nationalist tabloid Global Times reported that the Ma arrested was a director of hardware research and development department of an IT company who was “brainwashed by outside anti-China forces.”

Alibaba Group and Ant Group did not immediately respond to a request for comment.

Ma, 57, has led a hermetic lifestyle since a landmark decision by Chinese regulators halted the $35 billion planned IPO of fintech giant Ant Group–where Ma is the largest individual shareholder–in Hong Kong and Shanghai.

Shortly after the IPO’s failure, Ma effectively disappeared from the public eye, raising eyebrows among Alibaba Group investors. The next time the business magnate was spotted in public occurred in October 2021, when he reportedly attended business meetings in Hong Kong and later went on a tour of Europe.

Earlier this year, government scrutiny turned to Ma’s dealings with the ruling Communist Party. In February, regulators arrested Zhou Jiangyong, formerly the highest-ranking Communist Party official of Hangzhou city, on suspicion of taking bribes linked to Ant Group.

A former English teacher, Jack Ma cofounded Alibaba Group, one of the world’s largest e-commerce businesses. Alibaba’s 2014 IPO in New York set a record as the world’s biggest public stock offering, raising $25 billion.

With a real-time net worth of $24.3 billion, Ma was the ninth-wealthiest person in China on the Forbes World’s Billionaires list. Ma took the top spot on the 2021 Forbes China Philanthropy List, having donated the equivalent of $500 million to causes including education and the environment.