Alibaba Founder Jack Ma Will Relinquish Control In Ant Fintech Venture – Will Shelved IPO Be Revived? – Alibaba Group Holding (NYSE: BABA)
Alibaba Group Holding Limited BABA founder Jack Ma is reportedly planning to relinquish control of the e-commerce giant Ant Financial sister company.
What happened: Ma’s 10% stake in Ant will fall to 6.2% under the proposed plan, Reuters reported. His related entities also hold stakes in Ant, which together give him a controlling stake in the fintech company, which will change as part of the overhaul, the report said.
The development could pave the way for Ant to revive its shelved IPO, analysts said, according to Reuters.
Ant first filed for an ambitious $37 billion IPO in 2020, hoping to list its stake on both the Shanghai and Hong Kong stock exchanges. In China, the stock was to be listed on the STAR Market, which is similar to the Nasdaq stock exchange in the U.S. The Shanghai Stock Exchange later announced the suspension of the listing on the grounds that the company does not meet the conditions for listing or information. disclosure requirements, given significant factors such as the changes in the financial technology environment.
The shelving of the IPO was seen as the government’s move to crack down on high-profile companies in an attempt to rein them in and control their growth. Regulators also wanted Ant to organize as a financial holding company, which would bring it under additional regulatory scrutiny and stricter capital control norms.
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What’s next: The company has announced an initiative to restructure the business, including the formation of new committees and adaptation of voting rights.
Earlier this week, Ant reportedly received regulatory approval to raise about $1.5 billion in cash for its consumer lending arm. It recently announced a change in management and updated its marketing guidelines to comply with consumer protection rules.
However, the change in controlling structure could delay the IPO due to listing regulations, which dictate that companies seeking to list on the domestic A-share market should wait three years after a change in control, Reuters said. The waiting period is two years for listing on the STAR market and one year for the Hong Kong stock exchange.
Alibaba ended Friday’s session 2.70% higher at $107.40, according to Benzinga Pro data.
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