Ant Group Co (螞蟻集團) founder Jack Ma (馬雲) is to give up control of the Chinese fintech giant in an overhaul that seeks to draw a line under a regulatory crackdown that was triggered soon after its mammoth stock market debut was scuppered two years ago.
Ant’s US$37 billion initial public offering (IPO), which would have been the world’s largest, was canceled at the last minute in November 2020, leading to a forced restructuring of the financial technology firm and speculation the Chinese billionaire would have to cede control.
While some analysts have said a relinquishing of control could clear the way for the company to revive its IPO, the changes announced by the group yesterday are likely to result in a further delay due to listing regulations.
Photo: Reuters
China’s domestic A-share market requires companies to wait three years after a change in control to list. The wait is two years on Shanghai’s NASDAQ-style STAR market, and one year in Hong Kong.
A former English teacher, Ma previously possessed more than 50 percent of voting rights at Ant, but the changes mean his share would fall to 6.2 percent, Reuters calculation showed.
Ma only owns a 10 percent stake in Ant, an affiliate of e-commerce giant Alibaba Group Holding Ltd (阿里巴巴), but has exercised control over the company through related entities, said the IPO prospectus that Ant filed with the exchanges in 2020.
Ma’s ceding of control comes as Ant is nearing the completion of its two-year regulatory-driven restructuring, with Chinese authorities poised to fine the firm more than US$1 billion, Reuters reported in November last year.
The expected penalty is part of Beijing’s sweeping and unprecedented crackdown on the country’s technology titans over the past two years that has sliced hundreds of billions of dollars off their values and shrunk revenues and profits.
However, Chinese authorities have in the past few months softened their tone on the tech crackdown amid efforts to bolster a US$17 trillion economy that has been badly hurt by the COVID-19 pandemic.
Ant’s market listing in Hong Kong and Shanghai was derailed days after Ma publicly criticized regulators in a speech in October 2020. Since then, his sprawling empire has been under regulatory scrutiny and going through a restructuring.
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