20.7 C

Chinese billionaire Jack Ma cedes control of  fintech giant Ant Group



Jack Ma is giving up controlling rights of Ant Group Co., as the billionaire further retreats from his online empire following China’s unprecedented tech crackdown. 

The company is offering 10 individuals, including the founder, management and staff, voting rights independently, effectively removing Ma’s control of Ant, according to an announcement on Saturday. The adjustment will not change economic interests of any shareholders. 

Ma has mostly disappeared from public view since giving a speech that criticized Chinese regulators on the eve of the scuttled Ant listing in 2020. Many of his peers have relinquished their formal corporate roles and increased donations to charity to align with President Xi Jinping’s vision of achieving “common prosperity.”

Ant has since focused on overhauling its business operations to appease regulators. It’s ramping up its capital base for its consumer loan affiliate, moved to build firewalls in an ecosystem that once allowed it to direct traffic from payment platform Alipay, with a billion users, to services like wealth management and consumer lending. 

The change of control could mean that Ant will have to wait longer for a much anticipated resumption of its initial public offering. Companies can’t list domestically on the country’s so-called A-share market if they have had a controller change in the past three years — or in the past two years, if listing on Shanghai’s STAR market. For Hong Kong’s stock exchange, this waiting period is one year.

Ma’s fintech giant was poised to conduct the world’s biggest listing in 2020, challenging the nation’s biggest state lenders, before it was scuttled as regulators launched a crackdown on the industry.

Ma will still hold voting rights and economic interests in the company following the change. In a filing in July, affiliate Alibaba Group Holding Ltd. reiterated that Ma “intends to reduce and thereafter limit his direct and indirect economic interest in Ant Group over time” to a percentage that doesn’t exceed 8.8%.

Ma will have about 6.2% of the voting rights after the adjustment, based on Bloomberg calculations.

Ant’s board will be made up of a majority of independent directors after the company introduces a fifth one, according to the statement.

The Chinese government’s multi-year crackdown has reined in breakneck growth for the entire internet sector, and left global investors feeling the shockwaves. It’s changed the playbook for the nation’s tech champions who once prioritized growth at all costs, introducing a new paradigm for the country’s private sector. 

Ant’s consumer lending affiliate recently received regulatory approval for a capital injection of 10.5 billion yuan ($1.5 billion), signaling progress in its restructuring and removing a hurdle as it seeks to obtain a financial holding license. The company could issue about 400 billion yuan to 500 billion yuan of loans after the changes, based on Bloomberg calculations. 

Our new weekly Impact Report newsletter examines how ESG news and trends are shaping the roles and responsibilities of today’s executives. Subscribe here.

Source link

Subscribe to our magazine

━ more like this

Nike’s boss says remote work was hurting innovation, so the company realigned and is ‘ruthlessly’ focused on building a disruptive pipeline

Nike CEO John Donahoe is the latest corporate boss to weigh in on working from home or working in person, and his verdict...

Blackmagic Design releases a DaVinci Resolve editing panel for iPads

At 14.33 inches by 7.18 inches, the Micro Color Panel is about the size of a computer keyboard. It has an iPad Pro...

House Speaker Mike Johnson says he will push for aid to Israel and Ukraine this week

 House Speaker Mike Johnson said Sunday he will try to advance wartime aid for Israel this week as he attempts the difficult task of winning...

Record-high gold prices trigger a flood of selling. ‘People are using gold as an ATM they never had’

Investors and metals traders can’t agree on what exactly is behind gold’s recent rally. At King Gold & Pawn in Brooklyn, the customers don’t care. They...

Israel-Iran conflict adds to Fed’s caution on rate cuts as oil prices may disrupt inflation fight—but China and OPEC+ could ease pressure, Capital Economics...

Increased tension in the Middle East following Iran’s attack on Israel likely gives the Federal Reserve even more cause to go slow on...