BEIJING: In response to a Communist Party assault on the country’s internet sector that singled out the flamboyant billionaire, Jack Ma will relinquish leadership of Chinese fintech behemoth Ant Group, the business announced on Saturday.
Ma, one of China’s most well-known businessmen, formerly served as an example for a generation of Chinese technology tycoons with his rags-to-riches story and love of public display.
However, the former English teacher has withdrawn from the public eye after Beijing destroyed Ant’s anticipated IPO in Hong Kong in 2020 as a result of his scathing remarks about government regulators.
In a statement released on Saturday, his business announced changes to its ownership structure that would prevent “any shareholder, acting alone or in concert with other parties, from exercising control over Ant Group.”
The notice outlined the company’s previous complicated organisational structure and stated that Ant was the “control person” because Ma indirectly owned 53.46% of his shares.
According to the information in the statement, he will only possess 6.2% of the voting rights after the adjustment.
According to the Ant statement, the change is being made to further improve the stability of our company structure and the sustainability of our long-term development.
It stated that ten people, including the founder, management, and employees, will “use their vote rights independently.”
The alterations won’t affect any stockholders’ financial interests.
Crackdown
At the time of its catastrophic withdrawal, Ant’s planned IPO would have set a new record for a listing, and Jack Ma’s other business ventures were coming under increased government scrutiny.
Beijing also levied a record $2.75 billion punishment against Alibaba, the internet giant that Jack Ma co-founded and which runs the well-known Chinese retail portals Taobao and Tmall, for suspected unfair business practices.
Authorities said last month that Ant had obtained approval to raise 10.5 billion yuan ($1.5 billion) for its consumer financing arm, signaling that the official grip may now be relaxing.
The China Banking and Insurance Regulatory Commission in the city of Chongqing will allow the company to increase its registered capital from eight billion yuan to 18.5 billion yuan, as per a notification published on December 30.
Amid optimism that the industry restrictions might be relaxed, news of the approval sent Alibaba’s stock jumping about 9% in Hong Kong trading.
Alibaba reported a loss of 20.6 billion yuan for the third quarter in its most recent earnings report in November. For the first time, the firm did not provide complete sales data for its Singles Day shopping extravaganza in 2022.
Ma once performed on stage with well-known Chinese and foreign celebrities at the e-commerce festival, but in recent years it has become less of a buzz. People view this festival as a key indicator of Chinese consumer sentiment.
Since Ant’s failed IPO, Ma has kept a lower profile, interspersed with appearances at charitable functions and sporadic trips abroad. This week, he was in Thailand, according to a Saturday Bloomberg News report.