CHINA: Chinese magnate Jack Ma will give up control of a Chinese fintech giant, Ant Group, as the billionaire pulls back from his online empire following an unprecedented tech crackdown in China.
“No stakeholder, alone or jointly with other parties, will have control over Ant Group after the adjustment,” the business stated in a statement.
The adjustments are meant to reduce Ant’s dependence on a flamboyant Chinese billionaire who assisted in the creation of Ant and co-founded Alibaba Group Holding, the journal previously reported.
Ant founder Jack Ma and the other nine major shareholders, including management and staff, hold voting rights independently, a company’s statement reads.
The revisions, it continued, will not alter the economic interests of Ant’s stockholders.
In order to ensure that independent directors make up the majority of the board of the company, Ant also announced that it would appoint a fifth independent director to its board. There are presently eight board members.
The financial technology business had to restructure when Ant’s $37 billion IPO, which would have been the largest in history, was abruptly postponed in November 2020, and there were rumours that the Chinese billionaire might have to give up control.
The adjustments made by the group on Saturday, however, are likely to cause a further delay due to listing regulations, even though some analysts have suggested that a transfer of ownership could allow the business to relaunch its IPO.
Following a change in control, businesses must wait three years before attempting to list on China’s domestic A-share market.
On Shanghai’s STAR market, which is modelled after the Nasdaq, the waiting period is two years, while it is only a year in Hong Kong.
Prior to the modifications, Jack Ma, a former English teacher, held more than 50% of Ant’s voting rights; but, according to estimated calculations, his share will now be just 6.2%.
Jack Ma only owns a 10 percent stake in Ant, a division of the massive e-commerce conglomerate Alibaba Group Holding Ltd. (9988.HK), but has exercised control over the business through connected entities, as per Ant’s IPO prospectus published with the exchanges in 2020.
Jack Ma’s decision to relinquish control of Ant comes as the business is nearing the conclusion of a two-year regulatory-driven restructuring and is anticipating a fine of more than $1 billion from Chinese authorities, according to a November report.
The predicted fine is a part of Beijing’s vast and unprecedented crackdown on the country’s technical behemoths over the previous two years, which has decreased their value by hundreds of billions of dollars and shrunk profits and revenues.
The change, which started in the middle of last year, was officially confirmed by Ant’s declaration on Saturday that its management will no longer take part in the Alibaba Partnership, an organisation that can nominate the majority of the e-commerce behemoth’s board.
Also Read: COVID-19 Cases Surge in China Sparking Global Concerns
