Jack Ma relinquishes control of Ant Group

Chinese billionaire Jack Ma is to relinquish control of Ant Group, the fintech company revealed on Saturday, as the founder continues to retreat from the online business following Beijing’s tech meltdown.

Ma will see his voting rights shrink from over 50 percent to 6.2 percent, according to calculations based on a statement from the online payments and loans provider. The planned change of control, first reported last July, would help free the company from the limbo it has experienced since an intended IPO was pulled at the last minute in November 2020.

A change in control means that Ant will have to wait a year before it can try for another listing in Hong Kong, or two years for the high-tech STAR board in Shanghai. But the timeline could be delayed if other regulatory requirements are not met.

Ma also co-founded leading e-commerce company Alibaba and spun off its Ant payments business in 2011. Ma’s standing at the companies has been in jeopardy since he delivered an ill-timed speech criticizing Chinese regulators and the country’s state-owned banks. of Ant’s IPO.

The speech prompted President Xi Jinping to force Ant’s listing and triggered a regulatory crackdown on the country’s biggest technology groups. Ma was forced to retreat from the limelight. He has increasingly spent his time outside of China, most recently living in Tokyo for many months.

The changes being implemented mean Ant will have no ultimate controller, the company said, adding that independent directors – which include Laura Cha, head of the Hong Kong exchange – will make up more than half of the board.

“As a result of the adjustment, the share structure of Ant Group will become more transparent and diversified, which will facilitate the smooth development of the company,” it said, adding that the changes would not affect day-to-day operations.

Ant has been forced to restructure over the past two years and outstanding issues include further increasing the capital base of its consumer lending unit, getting the right licenses for its credit scoring unit and getting approval for its plan to become a financial holding company.

Analysts said the change in control would represent a significant step forward for the “correction” process required by China’s top financial regulators.

Li Chengdong, head of internet think tank Haitun, said the handover of control likely indicated a conclusion of the regulatory investigations into Ma and the fintech group.

“The next step is starting to talk about the IPO, but the chances of that in the mainland are probably not high, Hong Kong is more likely because domestic regulators prioritize ‘hard tech’ IPOs and still don’t encourage fintech groups,” he said.

Duncan Clark, founder of Beijing-based BDA Consultancy, said the government had been working to restore control of the sector. “Jack ceding control is probably the culmination of the campaign,” he said. “The need to restore investor confidence and stimulate growth probably now outweighs everything.”