Billionaire Jack Ma Relinquishes Control of China’s Ant Group | Technology news

Business magnate Jack Ma, who controlled more than 50 percent of the fintech giant’s shares, will now own just 6.2 percent.

Chinese business magnate Jack Ma will relinquish control of fintech giant Ant Group following a Communist Party attack on the country’s technology sector that targeted the billionaire.

The company said in a statement on Saturday that it is adjusting its ownership structure so that “no shareholder, alone or together with other parties, will have control over Ant Group”.

In November 2020, Ant’s $37 billion initial public offering (IPO), which would have been the world’s largest, was canceled at the last minute. It led to a forced restructuring of the financial technology firm and speculation that the Chinese billionaire would have to relinquish control.

Ma indirectly controlled 53.46 percent of Ant Group’s shares, making him the company’s “controlling person”. But now he will have only 6.2 percent of the voting rights after the adjustment, according to the information in the statement.

“The adjustment is being implemented to further improve the stability of our corporate structure and the sustainability of our long-term development,” the Ant statement said.

Ten people – including the founder, management and employees – will “exercise voting rights independently”, it said.

Andrew Collier, a capital researcher, told Al Jazeera that Beijing had two problems with Ma.

Collier explained that Ma is a “well-funded, very popular billionaire who controls two big companies” and that he began to compete with some state-owned banks in China that are the “backbone of the economy”.

“For those two reasons, they thought he was a threat, and they cut him down to size.”

Ant powers Alipay, the world’s largest digital payment platform, which boasts hundreds of millions of monthly users in China and beyond.

Decomposition

Ma’s relinquishment of control comes as Ant nears completion of its two-year regulatory-driven restructuring, with Chinese authorities poised to fine the firm more than $1 billion, Reuters news agency reported in November.

Speaking at a summit in Shanghai, the mercurial tycoon said banks were operating with a “pawn shop” mentality and accused financial watchdogs of stifling growth.

The expected punishment is part of Beijing’s sweeping crackdown on the country’s tech titans over the past two years, which has slashed hundreds of billions of dollars from their values ​​and reduced revenues and profits.

But Chinese authorities have in recent months played down the tone on the tech crackdown amid efforts to shore up a $17 trillion economy that has been hit hard by the COVID-19 pandemic.

“With the Chinese economy in a very feverish state, the government is looking to signal its commitment to growth, and technology, the private sector is key to that as we know,” said Duncan Clark, chairman of investment advisory firm BDA China.

“At least Ant investors can [now] have a timetable for an exit after a long period of uncertainty, said Clark, who is also the author of a book about Alibaba and Ma.

Beijing has also hit Alibaba — the Internet titan co-founded by Ma that runs popular Chinese shopping platforms Taobao and Tmall — with a record $2.75 billion fine for alleged unfair practices.

However, in a sign that the official grip is now loosening, authorities said last month that Ant had received approval to raise 10.5 billion yuan ($1.5 billion) for its consumer finance division.

News of the approval sent shares in Alibaba soaring nearly 9 percent in Hong Kong trading, while other technology firms also strengthened on hopes that the sector’s crackdown could ease.

Alibaba’s latest earnings data in November showed a loss of 20.6 billion yuan ($3 billion) for the third quarter. The company did not release full sales figures for its 2022 Singles’ Day shopping bonanza for the first time.

Ma has kept a lower profile since Ant’s failed IPO, punctuated by appearances at charity events and occasional sojourns abroad.