(Bloomberg) — Wealthy investors rushed to offload stock in Alibaba (NYSE:) Group Holding Ltd. after China began an investigation into alleged monopolistic practices at billionaire Jack Ma’s internet giant, according to Citigroup Inc (NYSE:).’s private bank.
“A large number” of the bank’s ultra-rich clients cut or exited their holdings in China’s largest e-commerce firm 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 (OTC:) 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 U.S.-traded shares down about a fifth since early November.
Read more: China Halts Ant Group’s IPO, Throwing Ma Empire Into Turmoil
China’s central bank said 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 billion fortune, according to the Bloomberg Billionaires Index.
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