Donald Trump’s executive order against Ant Group’s Alipay, together with the unknown whereabouts of Jack Ma, who founded the latter’s parent, Alibaba, is a stark reminder of how the group now sits squarely in the crosshairs of the governments of the world’s two largest economies.

The U.S. President’s step against Alipay earlier this week adds another strand to a saga that has mushroomed in so many directions that it is hard to decipher what is what.

When Ant’s Initial Public Offering, or IPO, was suspended in early November 2020 on the Shanghai and Hong Kong stock exchanges, the former released a statement, broadly echoed by Ant itself, that the step was a result of «material matters relating to the regulatory interview of senior executives» and «recent changes» in the Fintech regulatory environment.

Dominated by Few

After this, a flurry of reporting and speculation, but nothing that concrete until December 8, when Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC), attended the Singapore FinTech Festival.

In a video speech, he noted that the micropayment market was «dominated by a few tech companies,» indicating that competitive practices, data collection, information disclosure and public conduct would be looked at more closely.

Highly Concentrated

The valid question Ant investors probably still have, particularly those who were successfully allotted shares in the IPO and then had to apply for refunds, is why the regulatory authorities did not start scrutinizing them earlier. In 2018 or 2019, for example, the last publicly available statistics from Chinese consultancy iResearch, show Alipay having almost 55 percent of the mobile payment market and Tenpay (Wechat) with almost 40 percent.

No Santa For Alibaba

Somewhat separately, on Christmas Eve, parent Alibaba received a notice of investigation from the State Administration for Market Regulation of the People’s Republic of China (SAMR) in connection with the country’s anti-monopoly law.

Naturally, they also indicated they would «actively cooperate» with it.

On the Laundry List

The, in late December, the People’s Bank of China (PBC) Deputy Governor Pan Gongsheng publicly discussed the 26 December meeting between Ant, the PBC, CBIRC, the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange (SAFE).

He was more explicit, saying Ant had «weak law-abiding awareness», indicating a list of rectification measures, among them a «return to its origins» in payment services, the operation of a personal credit reporting business «on a licensed basis» and adherence to capital adequacy standards.

Little Governance

A review of Alibaba’s 2019 annual report and other disclosures do reveal, at best, an almost glib approach to corporate governance, particularly for a company that size.

Given that, there may be some truth to a large amount of speculation in the media that the main Chinese tech companies grew to the size they have with the tacit approval of the government. If nothing else,  whatever support they had has now been taken away – and the future ramifications of the recent steps will not be clear for a while.

Parting Gift

We are now back where we started, with Donald Trump. He has left President-elect Joe Biden with a great deal more than he bargained for, even before a mob rampaged through congress. His executive order banning Alipay, WeChat and others from any transactions in the U.S. will only be effective 43 days from now, well into Biden’s first administration.

In the meantime, many will be left wondering how Alibaba and Ant managed to get under the skin of the governments of both the world’s two largest economies in just four short months.

And Jack Ma’s whereabouts, apparently, are still unknown.