Jack Ma will relinquish control of Alibaba’s fintech business in shareholder renewal

by James · January 9, 2023

Alibaba founder Jack Ma will relinquish control of his fintech affiliate, Ant Group, as part of changes the company says are aimed at improving its corporate governance and transparency.

The “adjustment” of the share structure will see changes in the voting rights of the largest shareholders, including Ma, according to a statement released on Saturday by Ant.

The Chinese fintech company said Ma has a controlling stake and voting rights via Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Investment Partnership. Hangzhou Yunbo Investment Consultancy is the general partner of both investment companies, which together own 53.46% of the Ant shares.

Ma owns a 34% stake in Hangzhou Yunbo, while other major shareholders Eric Xiandong Jing, Simon Hu and Fang Jiang hold 22% shares each. All are linked via an agreement to “act together” with respect to their voting rights, with Ma the controlling vote, in matters concerning Ant.

This will no longer be the case following the changes, which will result in Ma, Jing, Hu and Fang giving up their arrangement to act together when exercising their voting rights.

Hangzhou Yunbo Investment will also leave the cooperation with Hangzhou Junhan, disconnecting the links between Ant’s two investors, while another investment group Hangzhou Xingtao Enterprise Management Consultancy will fill the gap. Ma also has stakes in Hangzhou Xintao.

Once completed, the restructuring will mean that no single shareholder – working alone or with another shareholder – will have the power to control the outcome of general meetings, Ant said.

It added that none of the 10 largest shareholders will have the power to nominate the majority of the board and will therefore not be able to control the company.

Alibaba’s shares rose 8.7% on Monday after news of the shareholder changes.

In November 2020, Ant withdrew plans for an IPO in Shanghai and Hong Kong after regulators found the company did not meet the requirements to do so.

The latest restructuring is part of various initiatives it has rolled out since 2021, to “optimize” the company’s corporate governance and establish “long-term sustainable development,” Ant said in its statement. These include increasing the number of independent directors to four, making up half of the sitting members on the organisation’s board. A further fifth independent director will also be appointed, meaning that independent directors will make up the majority of the board, according to Ant.