World’s Rich Fled Alibaba After Monopoly Probe, Citi Says

Wealthy investors rushed to offload stock inAlibaba Group Holding Ltd. after China began an investigation into alleged monopolistic practices at billionaireJack Ma’s internet giant, according toCitigroup Inc.’s private bank.

“A large number” of the bank’s ultra-rich clients from the Europe, the Middle East and Africa region cut or exited their holdings in China’s largest e-commerce firm in December, after reports of the probe emerged, Citi Private Bank’s Lab for Family Offices said in a report released Tuesday. China’s stock market previously attracted significant inflows from the firm’s wealthiest customers in the second half of the year, according to the report.

Once hailed as drivers of economic prosperity and symbols of the country’s technological prowess, Alibaba and rivals including Tencent Holdings Ltd. face increasing pressure from regulators after amassing hundreds of millions of users and gaining influence over almost every aspect of daily life in China. The $35 billion initial public offering of Alibaba’s affiliate payments firm — Ant Group Co. — was abruptly halted last year, helping send Alibaba’s American depositary receipts down more than a fifth since late October.

Read more: China Halts Ant Group’s IPO, Throwing Ma Empire Into Turmoil

China’s central banksaid last week that Ant Group is working on a timetable to overhaul its business while ensuring operations continue, underscoring the determination to rein in Ma’s business and offering little clue on how far the firm needs to go to assuage Beijing. Ant Group makes up more than a quarter of Ma’s $52.9 billion fortune, according to theBloomberg Billionaires Index.

Alibaba shares jumped as much as 11% in Hong Kong trading on Wednesday asMa resurfaced for the first time since early November, when he went quiet amid the government’s probes into Ant and Alibaba. He addressed teachers via livestream during an annual event he hosts for rural educators, people familiar with the matter said, helping quell rumors about his fate.

— With assistance by Lulu Yilun Chen

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