Jack Ma gives up control of fintech giant Ant Group

The billionaire founder of Ant Group, Jack Ma, is to relinquish control of the Chinese fintech giant following a regulatory crackdown.

Ant Group said that after the change, no one would have overall control.

The formerly flamboyant Mr Ma has rarely been seen in public since criticizing China’s financial sector in 2020.

Following that criticism, Ant Group’s planned IPO was abruptly stopped.

Ant Group operates Alipay, the main electronic payment system in China, which has transcended cash, checks and credit cards.

Mr Ma, a former English teacher who founded e-commerce giant Alibaba, directly and indirectly controls more than 50% of Ant Group.

In November 2020, Ant’s £26bn IPO, which would have been the world’s largest, was canceled at the last minute.

At the eleventh hour, Chinese authorities cited “major problems” regarding regulation of the firm.

Some analysts saw it as an attempt by the Chinese government to humiliate a company that had become too powerful and a leader who had become too outspoken.

The regulatory crackdown came after Ma told a financial conference that traditional banks had a “pawnbroker mentality”.

He also praised the benefits of the digital banking system, stressing that future lending decisions should be based on data, not security.

After the collapse of the IPO, which would have made Mr Ma the richest person in China, he disappeared for three months, prompting speculation about his whereabouts.

He eventually resurfaced, according to reports, but has avoided the limelight since then.

Mr Ma controls Ant through his shareholding and by acting in consultation with other shareholders.

But Ant said shareholders had agreed to no longer act together when exercising voting rights, and would only vote independently.

The share structure will also change.

However, Ant said the shareholders’ financial 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.”

Ant Group is nearing completion of a two-year restructuring that has been driven by regulators, and Chinese authorities are poised to fine the company more than $1 billion, according to Reuters news agency.

The expected punishment is part of a sweeping crackdown on China’s tech giants over the past two years that has cut hundreds of billions of dollars off their values ​​and reduced revenue and profits.

However, the authorities have softened their tone recently amid efforts to strengthen the Chinese economy, which has been hit by the Covid pandemic.