Jack Ma, the billionaire founder of Ant Group, is about to relinquish control of the Chinese fintech giant following a regulatory crackdown.
Ant Group said no one has total control after the change.
Since criticizing China’s financial sector in 2020, the once flamboyant Mr. Ma has rarely appeared in public.
After this criticism, Ant Group’s planned IPO was abruptly called off.
Ant Group operates Alipay, China’s leading online payment system, which outperforms cash, checks, and credit cards. Ma Yun is a former English teacher who founded e-commerce giant Alibaba and directly and indirectly controls more than 50% of Ant Group.
However, he will control just over 6% of his company following the change in management structure, according to a statement from Ant Group.
In November 2020, Ant’s £26 billion IPO was supposed to be the world’s largest but was canceled at the last minute.
At the 11th hour, Chinese officials cited “significant issues” in the company’s regulation.
Some analysts see the Chinese government as trying to humiliate companies that have become too powerful and leaders that have become too outspoken.
The regulatory intervention came after Ma explained at a financial conference that traditional banks have a “pawn shop mindset”.
He also praised the merits of digital banking systems and emphasized that future lending decisions should be based on 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 controls Ant through his shares and by acting in concert with other shareholders.
However, Ant said shareholders agreed to no longer act collectively on the use of voting rights and to vote only independently.
The shareholder composition will also change.
However, Ant said the economic interests of shareholders would not change.
“The departure from Jack Ma-founded Ant Financial is a sign of China’s leadership reducing the influence of large retail investors,” said Andrew Collier, CEO of Orient Capital Research. showing determination. “This trend will continue to erode the most productive parts of China’s economy.”
Ant Group is about to complete its two-year restructuring pushed by regulators, according to Reuters.
The expected fines are part of a crackdown on China’s tech giants over the past two years, devaluing hundreds of billions of dollars and slashing revenues and profits.
But officials have recently softened their tone to bolster China’s economy, which has been hit by the coronavirus pandemic.