© Reuters. FILE PHOTO: Jack Ma, co-founder and executive chairman of Alibaba Group attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China, September 17, 2018. Photo taken September 17. 2018. REUTERS / Aly Song / File Photo / File Photo
HONG KONG/BEIJING (Reuters) – Chinese billionaire Jack Ma plans to cede control of Ant Group, the Wall Street Journal reported on Thursday, following a regulatory crackdown that affected a $37 billion IPO la in 2020 and forced to restructure the giant biofinancial technology.
While Ma only owns 10% of the shares of Ant, an affiliate of Alibaba (NYSE:) Group Holding Ltd, he exercises control of the company through related entities, according to Ant’s IPO prospectus filed with exchanges in 2020.
The prospectus shows that Hangzhou Yunbo, an investment vehicle for Ma, has control over two other entities that own 50.5% of Ant’s shares.
The magazine said, citing unnamed sources, that Ma could cede control by transferring some of his voting rights to Ant officials, including CEO Eric Jing.
Ant informed regulators of Ma’s intentions as they prepared to restructure into a financial company, the report said, adding that regulators did not request changes but blessed them.
Ant and Alibaba did not immediately respond to Reuters’ request for comment.
Shares of US-listed e-commerce giant Alibaba fell 1.2% to $101.51 in pre-market trading after briefly surging higher.
In April last year, Reuters reported that Ant was exploring options for Ma to divest from Ant and relinquish control.
The discussions at the time came amid Ant’s reshuffle and a broader state crackdown on China’s tech sector that was kicked off after Ma publicly criticized regulators. reason in a speech in October 2020.
Ant’s IPO, possibly the largest in the world, was derailed a few days after the keynote, and Ma’s vast empire has come under regulatory scrutiny and has undergone restructuring ever since.
Ant operates the world’s largest and most popular Chinese mobile payment app Alipay, with over 1 billion users.
Once outspoken, Ma has kept an extremely low public profile as regulators readjust the country’s tech giants after years of adopting a liberal approach led to dizzying growth. .
“It’s been around for a while,” said Danni Hewson, financial analyst at AJ Bell.
“There will be some who think this has the potential to clear the way for Ant to skip a few years ago and try to get ahead on the front foot. There will be others who care deeply about what happens next because of Jack Ma. already such a great power.”
The change of control in Ant could slow down plans to revive a long-awaited IPO, the magazine reported, as China’s domestic A-share market requires companies to wait three years after the launch. change control to be listed.
The wait was two years in Shanghai’s STAR market and one year in Hong Kong.
Earlier this week, Alibaba’s annual report revealed that Ant executives are no longer members of the Alibaba Partnership, a body that can nominate the majority of the e-commerce giant’s board, as the pair split up to appease the managers.
Ant and Alibaba are also debunking their practices together and independently seeking new business, Reuters reported last month, citing sources.