Ant Group Co (螞蟻集團) denied a report that the Chinese finance-technology company is exploring ways for founder Jack Ma (馬雲) to sell his stake and give up control as a means to ease pressure from the country’s regulators.
Reuters on Saturday reported that officials from the People’s Bank of China and the China Banking and Insurance Regulatory Commission held talks with Ma and Ant separately between January and last month, where the possibility of Ma’s exit was discussed. The report cited people familiar with the matter.
The company hoped that Ma’s stake would be sold to existing shareholders in Ant or its e-commerce partner Alibaba Group Holding Ltd (阿里巴巴), Reuters reported.
Ant issued a statement to the news agency that said the divestment of Ma’s stake was not considered. The company reiterated the denial on Twitter following the report, saying that the “divestment of Mr. Ma’s stake in Ant Group has never been the subject of discussions with anyone.”
The Chinese government has been squeezing Ma’s Internet empire as part of an effort to imprint its authority indelibly on the country’s technology industry.
In landmark announcements this month, it slapped a record US$2.8 billion fine on Alibaba for abusing its market dominance, and then ordered an overhaul of Ant.
Ant is effectively to be supervised more like a bank, a move with far-reaching implications for its growth and ability to press ahead with a landmark initial public offering that the government abruptly delayed late last year.
The overhaul outlined by regulators and the company would see Ant transform itself into a financial holding company, with authorities directing the firm to open its payments app to competitors, increase oversight of how that business fuels it crucial consumer lending operations, and ramp up data protections.
It would also need to cut the outstanding value of its money-market fund Yu’ebao (餘額寶).
Bloomberg Intelligence senior analyst Francis Chan (陳永富) said in a report earlier this week that he expects Ant’s valuation to drop below 700 billion yuan (US$107.35 billion) from 2.1 trillion yuan in an earlier attempt to go public.
“Ant Group’s prospects could wane further after China halts improper linking of Alipay payments with Ant’s other products,” he said. “New curbs on Yu’ebao also hurts its wealth business.”
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