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For Chinese tech entrepreneur Wang Xing, an afternoon message from an old poem on social media may have been a $ 2.1 billion mistake.
Shares of Meituan, China’s largest food delivery platform, fell about 14% in Hong Kong last week after its founding he shared four stanzas written 1,000 years ago by poet Zhang Jie. Investors quickly interpreted Wang’s gesture in the poem, which was originally a critique of a Tang dynasty emperor, as a veiled attack on Chinese President Xi Jinping.
At Monday’s close, Wang’s personal fortune had fallen to $ 2.1 billion, to $ 18.8 billion after the charge.
The episode highlights the cold that has fallen on the Chinese technology sector. Alibaba rival, whose founder is Jack Ma largely gone from public view since last year, it was fined a record $ 2.8 billion last month for abusing their market dominance. Ma’s initial public offering of $ 37 billion fintech unit Ant Group, which would have been the largest in the world, was crushed by authorities in late November.
Online commentators have been quick to draw parallels between Meituan, who also faces a antitrust probe, and the problems of Ma. The crackdown on the Ma empire followed public criticism of the Internet billionaire of China’s state regulators and banks.
Meituan faces a fine of up to £ 11.5 billion ($ 1.8 billion) if regulators consider him to have participated in antitrust practices.
Wang, whom the Chinese state media has previously christened “The Poet Entrepreneur”, had been known for his daily reflections on social media on topics ranging from the praise of the sweet potato to the health of the legendary American investor Charlie Munger.
These ruminations have ceased since he offered an explanation of the poem he published entitled “Pits to Burn Books.” The poem mocked the actions of the first emperor of China who tried to stifle dissent among intellectuals by burning books, until his dynasty was overthrown by non-intellectuals. Before taking control of China in 1945, Mao Zedong wrote the same poem comparing himself to these revolutionaries.
The poems have been throughout Chinese history an outlet for dissidents to express their displeasure, but Wang said his place simply referred to Meituan’s e-commerce rivals.
Meituan’s chief executive has a history of executions with Chinese regulators.
Fanfou, the Twitter-like platform on which he published the poem this month, was created by Wang in 2007. The platform earned the reputation of its free exchange of ideas before authorities got upset and forced it out. line in 2009.
Fanfou re-emerged in a censored format, but is now only accessible to a small group of early users.
Following Fanfou’s goal by regulators, Wang told a Chinese journalist he hoped to avoid similar problems in the future. “You can’t go wrong and not learn any lessons,” he said. “Even if you think you understand, the rules always change.” He later admitted that he was not good at government relations.
Competitors describe Wang, who was educated in the United States, as confident and determined. Subordinates say he is curious, direct and works side by side among Meituan employees. At a press conference in 2011, he showed a Meituan bank account containing $ 62 million to prove the group was solvent.
“It’s like Jeff Bezos, very product-focused and pragmatic,” said Li Chengdong of the Haitun e-commerce think tank. “He’s in love with work. He doesn’t really enjoy life very much.”
Wang’s predilection for experimentation is evident in Meituan. The company started as a copy of the Groupon group shopping site, but now offers everything from movie tickets to payments.
“Ideas are fought over and executives are disciplined about killing companies that don’t work,” said a person close to the company. “They know what it’s like when it works.”
The scrutiny comes as Meituan invests heavily in building its grocery delivery business, leading to a loss of $ 2.2 billion in the fourth quarter. The company raised $ 10 billion debt and equity last month.
A likely antitrust fine may not be Meituan’s biggest challenge, as the group also faces criticism over the treatment of its estimated 1.5 million pilots who distribute meals in Chinese cities.
Like Uber, an American couple, Meituan does not directly employ pilots or provide them with benefits. Chinese media reports have focused attention on the harsh fines received by pilots for late deliveries and other violations. Last month, a senior labor official in Beijing he was disguised as a Meituan driver and only earned Rmb41 for a 12-hour delivery shift.
Robin Zhu, an analyst at the Bernstein Brokerage, notes that the city of Nanjing is conducting a lawsuit that requires full-time delivery drivers to receive benefits such as social security. Any measures to implement it across the country would affect Meituan’s cost structure, Zhu said.
It appears Wang is taking steps to appease regulators and told investors in March that Meituan could begin breaking its delivery rate structure to help “the regulatory authority… Better understand the mechanism.”
He has also tried to solve Meituan’s problems by opening his checkbook. In recent weeks, Wang has donated Rmb50m to his former high school in his home province, Fujian, and made a large donation to his alma mater, China’s prestigious Tsinghua University.
“We will play according to the rules. We will do our best to be a good corporate citizen, ”Wang said in March.
Additional reports from Nian Liu in Beijing
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