Jack Ma, the wealthy founder of Ant Group, will relinquish control of the Chinese fintech behemoth following a regulatory crackdown.
According to Ant Group, nobody will have overall control following the shift.
Since criticizing China’s financial industry in 2020, the formerly outgoing Mr. Ma has hardly ever been spotted in the public eye.
In response to that criticism, Ant Group’s intended stock market IPO was quickly scrapped.
Alipay, the primary online payment method in China that has supplanted cash, checks, and credit cards, is operated by Ant Group.
More than 50% of Ant Group is under the direct and indirect control of Mr. Ma, the former English teacher who established e-commerce behemoth Alibaba.
According to a statement from Ant Group, he will only have a little over 6% of the company after the modifications to the governance structure.
Ant’s planned £26 billion stock market IPO in November 2020, which would have been the biggest ever, was abruptly shelved.
Late in the game, Chinese officials noted “serious concerns” with the firm’s regulation.
According to some analysts, China was trying to bring down a corporation that had grown too strong and a leader who had become too loud.
After Mr. Ma stated at a finance conference that traditional banks had a “pawn-shop mindset,” the regulatory action was taken.
He also praised the advantages of the electronic banking system and emphasized the need for data to inform loan choices going forward rather than collateral.
Why did Jack Ma disappear 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 advances Ant through his ownership of the company and by coordinated action with other shareholders.
However, Ant said that shareholders had decided to solely vote independently going forward and would no longer combine their votes.
Additionally, the shareholding structure will alter.
However, Ant said shareholders’ economic interests would not change.
“Jack Ma’s departure from Ant Financial, a company he founded, shows the determination of the Chinese leadership to reduce the influence of large private investors,” said Andrew Collier, managing director of Orient Capital Research.
“This trend will continue the erosion of the most productive parts of the Chinese economy.”
According to the Reuters news agency, Ant Group is almost through with a two-year restructure that regulators forced, and Chinese officials are getting ready to punish the company more than $1bn.
The anticipated fine is a component of a comprehensive crackdown on China’s technology behemoths that has reduced their worth by hundreds of billions of dollars and decreased their revenues and earnings over the previous two years.
The authorities have recently however toned down their rhetoric in an effort to support the Chinese economy, which has been negatively impacted by the Covid epidemic.
