Jack Ma cedes control of Ant Group
Possible preliminary to a relaunched IPO
Jack Ma, chairman of China's Alibaba Group, is relinquishing control of Ant Group, moving further away from the business empire he founded decades ago.
It follows China's crackdown on the nation's tech sector, which has at times seemed to specifically target Ma - crushing plans for Ant's IPO in 2020, for example, after he made comments about the country's regulators.
Ant Group, an Alibaba affiliate that controls the world's most popular mobile payment app, Alipay, said this week that it is terminating agreements that gave Ma a dominant position in its corporate governance structure.
The company is now granting independent vote rights to 10 people, including the founder, management, and employees, thereby ending Ma's influence over Ant.
Reuters estimates that after the changes, Ma's voting rights will drop from more than 50% to just 6.2%.
The company said the changes will not impact its day-to-day operations and are intended to make its shareholding structure more transparent and diversified.
'No shareholder will, alone or jointly with another shareholder, have the power to control the outcome of Ant Group's general meetings. No shareholder will have the power to nominate the majority of Ant Group's board of directors. Therefore, no shareholder, alone or jointly with other parties, will have control over Ant Group.'
Ma holds just a 10% share in Ant, but has used related entities to exert influence over the business.
For example, his investment vehicle Hangzhou Yunbo controls two more corporations that together hold 50.5% of Ant.
China's tech crackdown
Ma's position in the companies he founded has been in jeopardy since 2020, when he delivered a speech criticising Chinese authorities and the country's state-owned banks on the eve of Ant's IPO.
Following the speech, the Chinese government cancelled the IPO - projected to raise $34 billion - and authorities ordered Ant to scale down its business.
A year later, following an antitrust probe into suspected monopolistic tactics by Ma's other company Alibaba, regulators penalised the firm $2.8 billion.
Ma has since stayed out of the spotlight. He has been spending more and more time outside of China; most recently, he spent several months in Tokyo.
Ant has since focused on improving its business operations to placate authorities.
While some experts believe a change in control might pave the way for the company's IPO to be revived, Ant's adjustments are likely to delay things further due to listing restrictions.
A company in China cannot list domestically on the nation's so-called A-share market if a controller change occurred in the previous three years.
The waiting period for Shanghai's STAR market and Hong Kong's stock exchange is two years and one year, respectively.