SHANGHAI –
Ant Group said on Saturday its founder Jack Ma will no longer control the Chinese fintech giant, as the company seeks to draw a line under a regulatory crackdown that has been activated immediately. after its massive stock market debut fell through two years ago.
Ant’s $37 billion IPO, which was supposed to be the world’s largest IPO, was canceled at the last minute of 2020, leading the financial technology giant to restructure and speculate that the billionaire China will have to cede control.
While some analysts say relinquishing control could clear the way for the company to resume an IPO, the change could lead to further delays due to listing regulations.
China’s domestic A-share market requires companies to wait three years after a change of control to list. The waiting period is two years on Shanghai’s Nasdaq-style STAR market and one year in Hong Kong.
Ma owns only 10% of Ant, an affiliate of e-commerce giant Alibaba Group Holding Ltd., but exercised control of the company through related entities, according to the IPO prospectus. of Ant filed with exchanges in 2020.
The prospectus shows that Hangzhou Yunbo, an investment vehicle by Ma, has control over two other entities that own a combined 50.5% stake in Ant.
Ant said that Ma and its nine other major shareholders have agreed to no longer act in sync when exercising their voting rights and will vote only independently. It added that the economic interests of shareholders in Ant will not change as a result of the adjustments.
Ma previously owned more than 50% of the voting rights in Ant but the changes will mean his stake drops to 6.2%, according to Reuters calculations.
Ant also said it would add a fifth independent director to its board so that independent directors would make up a majority of the company’s board. It currently has eight board directors.
“As a result, there will no longer be a situation where a single shareholder directly or indirectly has sole or common control over Ant Group,” it said in its statement.
Reuters reported in April 2021 that Ant was exploring options for Ma to divest his stake in Ant and relinquish control.
The Wall Street Journal reported last July, citing unnamed sources, that Ma could cede control by transferring some of his voting rights to Ant officials, including the CEO. executive Eric Jing.
Ant’s market listing in Hong Kong and Shanghai was derailed a few days after Ma publicly criticized regulators in a speech in October 2020. Since then, empire wide His major was subject to regulatory scrutiny and underwent restructuring.
Ant operates China’s popular mobile payment app Alipay, the world’s largest app with over 1 billion users.
Once outspoken, Ma has kept an extremely low public profile over the past two years, as regulators clamp down on the country’s tech giants and scrap the liberal approach that fuels dizzying growth. .
Andrew Collier, managing director of Orient Capital Research, said: “The departure of Jack Ma from Ant Financial, the company he founded, shows the determination of the Chinese leadership to reduce the influence of investors. large private sector.
“This trend will continue to erode the most productive parts of the Chinese economy.”
As Chinese regulators frown on monopolies and unfair competition, Ant and Alibaba have untangled their practices from each other and sought out new business independently, Reuters reported last year. last.
Ant said on Saturday that its management would no longer serve in Alibaba Partners, a body that can nominate the majority of the e-commerce giant’s board, affirming a change. starting in the middle of last year.
(Reporting by Yingzhi Yang and Brenda Goh; edited by William Mallard and Jacqueline Wong)
