One of the most influential financial technology companies in China, Ant Groupsaid Saturday that billionaire entrepreneur Jack Ma plans to relinquish control of the company.
Mr. Ma’s departure from the company he founded comes after the ruling Communist Party launched an unprecedented crackdown on Big Tech. Beijing has turned Mr Ma’s Ant Group and its subsidiary, e-commerce giant Alibaba, into the crown jewel of its online empire. early targets in the campaign to curb the power of internet giants.
Chinese officials had forced Ant Group to cancel what would have been a blockbuster initial public offering in 2020 and beyond fines Alibaba a whopping $2.8 billion for abusing its dominance. Last year, Ant Group said it would undertake a government-ordered overhaul of its business to address concerns from regulators about unfair competition and the amount of data it collects on consumers.
Under Xi Jinping, China’s supreme leader, Beijing has sought to exert greater state control over the economy in recent years, including by reining in the influence of tycoons who have amassed vast wealth but have been seen overstepping their bounds.
Mr. Ma was once hailed in China as a model of success, but he has faced increasing trouble with the Chinese government, particularly after criticizing the nation’s banking regulators in late 2019. He has largely disappeared from public view in recent years.
Ant Group said in a statement on Saturday that Mr. Ma would no longer be the “controlling individual” who holds 34 percent of the company’s shares. Instead, he will be one of the 10 major shareholders.
The announcement, which described the move as part of a plan to “streamline corporate governance,” did not detail when the changes would be finalized and noted that they would not affect the company’s day-to-day operations. Under Ant Group’s current management structure, Mr. Ma has no management role.
Ant’s flagship Alipay app is the primary gateway for more than 1 billion users in China who use it to pay for food, shop on credit and save. But its influence and size have made it a center of concern for Beijing as authorities scrutinize the fintech industry for potential risks to the country’s wider financial system. Then, in 2020, just before that Ant had to go publicregulators sharply stopped the initial public offering, valued at the time at $34 billion, would have been the largest IPO on record.
It was not immediately clear how Mr. Ma’s departure from Ant Group might affect the fintech giant’s plans to resume its initial public offering. But it will likely be delayed due to listing requirements. The Hong Kong Stock Exchange requires a one-year waiting period after a change of ownership; other markets require two or three years.
Ant Group is working to restructure its companies in accordance with the requirements of the Chinese authorities. Last month, regulators approved a $1.5 billion capital increase plan for the consumer lending unit, allowing a unit of the Hangzhou government to become the second-largest shareholder. The capital raise clears a key regulatory hurdle that allows it to issue about 500 billion yuan, or $73 billion, in consumer loans.
The approval was the latest indicator that the Chinese government is ready to loosen its tough stance on internet companies in a bid to boost economic activity in 2023.
After a prolonged period of strict “zero covid” blockades and stiff fines and regulations for Ant Group and other tech giants, Li Qiang, the Communist Party’s new No. 2, urged cadres at an economic meeting in December to “vigorously develop the digital economy” and improve their global competitiveness.
Zixu Wang contributed research.
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