Jack Ma is giving up control of Ant Group Co., as the billionaire retreats from his online empire following China’s unprecedented tech crackdown.
The company is offering 10 individuals, including founders, management and staff, independent voting rights, effectively removing Ma’s control over Ant, according to an announcement on Friday. The adjustment will not change the economic interests of the shareholders.
Ma has largely disappeared from public view since giving a speech criticizing Chinese regulators on the night of Ant’s scuttled listing in 2020. Many of his colleagues have abandoned their formal corporate roles and increased their donations to charity to align with President Xi Jinping’s vision to achieve. “general prosperity.”
Ant has since focused on overhauling its business operations to appease regulators. It increased the capital base for consumer loan affiliates, moved to build a firewall in the ecosystem that once allowed direct traffic from the Alipay payment platform, with billions of users, to services like wealth management and consumer credit.
A change of control could mean Ant has to wait a little longer to restart its initial public offering. The company cannot register on the domestic market in the country called A-share market if it has changed its controller in the last three years – or in the last two years, if it is listed on the Shanghai STAR market. For the Hong Kong stock exchange, this waiting period is one year.
Fintech giant Ma is poised to hold the world’s biggest listing in 2020, challenging the country’s biggest state-owned lender, before being thrown out as regulators launch a crackdown on the industry.
Ma will still continue to have voting rights and economic interests in the company after the change. In a filing in July, an affiliate of Alibaba Group Holding Ltd. reaffirmed that Ma “intended to reduce and then limit his direct and indirect economic interests in Ant Group over time” to a percentage not exceeding 8.8%.
Ma will have about 6.2% of the voting rights after the adjustment, based on Bloomberg calculations.
Ant’s board will have a majority of independent directors after the company introduces a fifth one, according to the statement.
Years of abuses by the Chinese government have caused unsustainable growth for the entire internet sector, and sent global investors feeling the shockwaves. It has changed the playbook for the nation’s technology champions that once prioritized growth at all costs, introducing a new paradigm for the country’s private sector.
Ant’s consumer lending affiliate recently received regulatory approval for a 10.5 billion yuan ($1.5 billion) capital injection, marking progress in its restructuring and clearing hurdles as it seeks to obtain a financial holding license. The company could issue about 400 billion yuan to 500 billion yuan of loans after the changes, based on Bloomberg calculations.
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