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By Bloomberg News
(Bloomberg) — China’s government summoned Meituan’s Wang Xing to a meeting recently and warned him to keep a low profile, after the founder of China’s third-largest tech corporation last month posted a controversial poem that convulsed markets and sparked a social media furor.
Beijing officials called Wang in after the food delivery mogul posted a millennium-old poem regarded by many as implicit criticism of the government, according to people with knowledge of the matter. They warned him to refrain from courting the spotlight, at least temporarily, the people said, asking not to be identified as they weren’t authorised to discuss the matter.
The Tang Dynasty poem — describing the burning of books under China’s first emperor — was widely seen as anti-establishment and triggered a US$26 billion selloff in Meituan’s shares over two days. While the CEO later issued a clarification saying his post had been targeted at the short-sightedness of his own industry, some investors drew parallels to the criticisms issued by Alibaba Group Holding Ltd. founder Jack Ma against regulators last year, which triggered an unprecedented crackdown on China’s internet sector. The officials however indicated to Wang that no further fallout will result from the incident, the people said.
Shares of Meituan initially pared more than half their gains in afternoon trade, but recovered to end 3.7% higher on Friday. The company didn’t respond to a written request for comment.
Like Alibaba previously, Meituan is grappling with a probe by the state antitrust watchdog into alleged monopolistic behaviour such as merchant exclusivity, which some analysts have estimated could result in fines of over US$700 million.
Officials refrained from taking more severe action against Wang because they didn’t want to convey the impression that every minor transgression could result in dire consequences, one of the people said. The incident transpired less than two months before the Chinese Communist Party is poised to celebrate the 100th anniversary of its founding on July 1, a politically sensitive period in the country.
The entrepreneur has since stayed under the radar. Since Wang posted the statement clarifying his intentions on May 9, he’s abruptly stopped posting to his account on Fanfou, the social media platform he created before Meituan. Prior to the controversy, he updated his account at least several times a week.
The billionaire — who had a reputation for being comparatively media shy, even before the incident — hasn’t been seen nor heard in public beyond a brief appearance on Meituan’s quarterly earnings call in May. His donation of a US$2.3 billion stake in the food delivery giant to charity — one of the largest single acts of philanthropy during the pandemic — was revealed through a company disclosure statement to the Hong Kong Stock Exchange, in lieu of a personal announcement.
Beijing is now focusing its efforts on a broader investigation, announced in April, into whether Meituan violated anti-monopoly laws through practices such as forced exclusivity arrangements. Meituan executives said last month it’s set up a dedicated team to work with officials conducting the probe, and vowed strict compliance with new guidelines.
Wang’s fate contrasts with that of Alibaba’s Ma, whose business empire came under sustained assault from regulators. His fintech giant Ant Group Co. was forced to scrap what would have been a record initial public offering, while Alibaba was slapped with a US$2.8 billion fine for antitrust violations, the largest such penalty ever.
Ma is also under pressure to divest some of his media holdings, people familiar with the matter have said, and the flamboyant businessman hasn’t been seen in public beyond a handful of low-key appearances.
© 2021 Bloomberg L.P.