…of the folly of doing business with companies domiciled inside the People’s Republic of China.

The particular company is Ant, a financial institution that PRC regulators lately decided its owner Jack Ma was getting too impudent regarding government actions—was getting too big for his britches—so the regulators blocked Ant from going public unless and until it massively reorganized and at least to significant extent downsized.

Now let’s back up in time a little bit.

In 2018, an exclusive group of global private-equity firms and mutual-fund managers including Silver Lake, Warburg Pincus LLC, Carlyle Group Inc, and T Rowe Price Group Inc took part in a coveted fundraising by Ant that raised $14 billion and minted the financial-technology giant as the world’s most valuable startup.
More than $10 billion of the money came from international investors, which bought shares in an offshore shell company set up by Ant to raise funds in US dollars. The unusual arrangement came about because in order to secure a payment license to operate Alipay, its highly popular mobile app, Ant had to be domiciled in mainland China. But that also limited the company’s ability to raise funds directly from foreign investors.

That’s the why. Now the what.

The global investors agreed to terms that were highly favorable to Ant, and which limited their ability to cash out if the company didn’t end up going public, according to people familiar with the matter. Ant also didn’t provide a listing time frame or guarantee investors a return while it stayed private, the people added.
The foreign investors didn’t receive any voting rights in Ant…. None was given a seat on Ant’s board.

They can’t recoup their investment; they didn’t even get a say in the governance of the company. Just “Here’s a boatload of money. Y’all have a gud time, y’hear?”

Now that was an exceedingly dumb thing for those investors, supposedly experienced in investing, in international finance, and in investing in PRC businesses, to agree. But the larger thing is demonstrated by the PRC government men’s behavior: investing in a PRC business, or investing inside the PRC, is exceedingly dumb.