BEIJING: Chinese Billionaire Loses $27 Billion In World’s Biggest Wealth Drop

BEIJING: Colin Huang, the founder of
Chinese e-commerce platform Pinduoduo Inc, has lost more wealth this year than
anyone else in the world.

Huang’s
fortune has dropped by more than $27 billion, according to the Bloomberg
Billionaires Index, after the company’s stock plunged as China cracked down on
its internet giants. That’s the biggest decline among the 500 members of the
index, much larger even than the roughly $16 billion lost by China Evergrande
Group Chairman Hui Ka Yan, whose real estate empire is strugglingunder a pile
of debt.

It’s the
starkest example of how the tide has turned for China’s billionaire class as
President Xi Jinping calls for “common prosperity” and reins in the
country’s private-sector companies. Shares of Pinduoduo, or PDD, have fallen
more this year than either Alibaba Group Holding Ltd or Tencent Holdings Ltd.

PDD is
“more vulnerable to the crackdown compared to those peers with mature and
profitable models” like Alibaba and Tencent, said Kenny Ng, a securities
strategist at Everbright Sun Hung Kai Co in Hong Kong. “That’s the main
reason for the stock performance lagging behind other tech companies.”

A
representative for PDD didn’t respond to requests for comment.

Pinduoduo’s
American depositary receipts have dropped 44% this year, compared with a 33%
decline for Alibaba’s ADRs. Tencent’s shares have slid 20% this year in Hong
Kong.

Huang,
who owns 28% of PDD, founded the company in 2015 and quickly built it into an
e-commerce giant by pioneering community buying. PDD’s annual active users
climbed to 788 million in December, exceeding the 779 million users at
Alibaba’s online marketplaces.

The
company’s market value reached a peak of $178 billion before falling to about
$125 billion. It reported its first quarterly net profit as a public company
last month.

Huang,
who’s now worth about $35 billion, quit his role as chief executive officer
last year and stepped down as chairman in March.

PDD is
among the tech giants that have been pledging current and future corporate
profits to invest in philanthropy projects amid President Xi’s campaign to
close China’s wealth gap. It said last month it would allocate $1.5 billion in
earnings to help the development of agriculture in the country. Before that,
Huang and PDD’s founding team also gave $2.4 billion in the company’s shares to
a charitable trust last year.

Of the 10
billionaires with the biggest net worth declines this year, six are from China,
according to the Bloomberg index. They include Zhong Shanshan, the chairman of
bottled water company Nongfu Spring Co, who has lost $18 billion, Hui of the
besieged developer Evergrande, and Tencent’s Pony Ma, whose fortune has dropped
by more than $10 billion.

Apart
from those six, Jack Ma, the co-founder of Alibaba, has shed $6.9 billion in
wealth this year.