Billionaire Jack Ma gives up control of Chinese fintech giant Ant Group
Jack Ma is relinquishing controlling rights to Ant Group Co., as the billionaire retreats further from his online empire following China’s unprecedented tech meltdown.
The company offers 10 people, including the founder, management and employees, independent voting rights, effectively removing Ma’s control over Ant, according to an announcement Saturday. The adjustment will not change the financial interests of any shareholders.
Ma has mostly disappeared from the public eye since delivering a speech criticizing Chinese regulators on the eve of the staggered 2020 Ant listing. Many of his peers have relinquished their formal corporate roles and increased charitable donations to match President Xi Jinping’s vision of achieving “shared prosperity.”
Ant has since focused on overhauling its business operations to satisfy regulators. It is increasing the capital base of its consumer lending partner, moved to build firewalls in an ecosystem that once allowed it to direct traffic from the payment platform Alipay, with one billion users, to services such as wealth management and consumer loans.
The change of control may mean that Ant will have to wait longer for a long-awaited resumption of the initial public offering. Companies cannot list domestically on the country’s so-called A-share market if they have had a change of control in the past three years – or within the past two years if they are listed on Shanghai’s STAR market. For Hong Kong’s stock exchange, this waiting period is one year.
Ma’s fintech giant was poised to launch the world’s biggest IPO in 2020, challenging the country’s biggest state lenders, before it was scuttled as regulators launched a crackdown on the industry.
Ma will still have voting rights and financial interests in the company after the change. In a filing in July, affiliate Alibaba Group Holding Ltd. reiterated that Ma “intends to reduce and then limit his direct and indirect financial interest in Ant Group over time” to a percentage not exceeding 8.8%.
Ma will hold about 6.2% of the voting rights after the adjustment, based on Bloomberg calculations.
Ant’s board will consist of a majority of independent directors after the company introduces a fifth board, according to the statement.
The Chinese government’s multi-year crackdown has curtailed a boom in the entire internet sector, leaving global investors feeling the shockwaves. It has changed the playbook for the country’s technology champions who once prioritized growth at all costs, introducing a new paradigm for the country’s private sector.
Ant’s consumer loan affiliate recently received regulatory approval for a 10.5 billion yuan ($1.5 billion) capital infusion, signaling progress in its restructuring and clearing a hurdle as it seeks a financial holding license. The company could issue about 400 billion yuan to 500 billion yuan in loans after the changes, based on Bloomberg calculations.
