Tencent boss loses $19b in Chinese crackdown

HONG KONG • Turns out even the most compliant Chinese billionaires are not immune to the regulatory onslaught sweeping the world's second-largest economy.

In a twist that has upended conventional wisdom on the political pecking order of China's business elite, Tencent Holdings' mild-mannered boss, Mr Pony Ma, has lost more paper wealth over the past nine months than Mr Jack Ma, the combative co-founder of Alibaba Group Holding and Ant Group.

The reversal underscores how rapidly Beijing's crackdown has expanded since the authorities scuttled Ant's initial public offering (IPO) on Nov 3 last year. What initially looked like a targeted campaign against China's most outspoken tech tycoon has since spread to nearly every corner of the industry and beyond as regulators de-emphasise unfettered growth in favour of other priorities such as data security, financial stability and reduced inequality.

While Mr Pony Ma has long had a reputation for staying out of the limelight, that has not shielded his company from penalties including antitrust fines and the loss of exclusive music streaming rights. Tencent shares posted their biggest intraday decline in a decade on Tuesday after a state-owned newspaper took aim at the company's key gaming business, fuelling speculation it could become the next target of Beijing's crackdown.

Mr Pony Ma's fortune has dropped by almost US$14 billion (S$18.9 billion) since the Ant IPO was suspended in November, falling to US$45.8 billion on Tuesday, according to the Bloomberg Billionaires Index. He now ranks third on the China rich list behind Mr Jack Ma, who has a net worth of US$47.8 billion.

While the state media toned down their language on gaming yesterday, helping fuel a more than 5 per cent rebound in Tencent, the stock is still 17 per cent lower for the year. The outlook will depend in large part on what comes next from regulators, who shocked investors late last month with a clampdown on tutoring companies that will force many of them to become non-profits.

Tencent is already moving to assuage Beijing, pledging to further limit play time for minors and forbid in-game purchases for the youngest players. The company also broached the possibility of the industry banning games altogether for those under the age of 12.

BLOOMBERG

How much Mr Pony Ma's (photo) fortune has dropped to on Tuesday, since the Ant IPO was suspended in November, according to the Bloomberg Billionaires Index. He now ranks third on the China rich list behind Mr Jack Ma, who has a net worth of US$47.8 billion.