After a regulatory crackdown, Ant Group’s billionaire founder Jack Ma will relinquish control of the Chinese fintech behemoth.
No one would have overall control following the transition, according to Ant Group.
Since criticizing China’s financial sector in 2020, the formerly flamboyant Mr. Ma has been hardly ever seen in public.
The planned stock market listing of Ant Group was abruptly cancelled in response to that criticism.
The primary online payment system in China, Alipay, is operated by Ant Group and has supplanted cash, checks, and credit cards.
Founder of the massive e-commerce site Alibaba and former English teacher Mr. Ma have direct and indirect ownership interests in Ant Group totaling more than 50%.
However, according to a statement from Ant Group, his control will only be slightly more than 6% following the modifications in the governance structure.
Ant’s planned £26 billion stock market IPO in November 2020—the largest in history—was abruptly postponed.
Chinese officials claimed “serious difficulties” with the firm’s regulation at the last minute.
Some commentators believed it to be a move by the Chinese government to bring down a large firm and an outspoken boss.
The regulatory action followed Mr. Ma’s assertion that traditional banks had a “pawn-shop mindset” during a finance conference.
Additionally, he praised the advantages of the digital banking system and emphasized that going forward, lending choices should be made using data rather than collateral.
Why did Jack Ma of Alibaba vanish for three months?
After the stock market IPO that was supposed to make Mr. Ma the richest man in China failed, he vanished for three months, sparking questions about his whereabouts.
Reports state that he ultimately reappeared, but since then, he has been out of the public eye.
Mr. Ma has an interest in Ant and works with other shareholders to control it.
However, Ant said that shareholders had decided to solely vote independently going forward and would no longer combine their votes.
Additionally, the shareholding structure will alter.
The economic interests of shareholders, according to Ant, won’t alter.
According to Andrew Collier, managing director of Orient Capital Research, “Jack Ma’s resignation from Ant Financial, a firm he founded, illustrates the intention of the Chinese authorities to diminish the power of significant private investors.”
The most productive sectors of the Chinese economy will continue to deteriorate as a result of this tendency.
According to the Reuters news agency, Ant Group is almost through with a two-year restructure that regulators forced, and Chinese officials are getting ready to punish the company more than $1bn.
The anticipated fine is a component of a comprehensive crackdown on China’s technology behemoths that has reduced their worth by hundreds of billions of dollars and decreased their revenues and earnings over the previous two years.
The authorities have recently however toned down their rhetoric in an effort to support the Chinese economy, which has been negatively impacted by the Covid epidemic.