Billionaire entrepreneur Jack Ma will be relinquishing control of the financial tech company he founded in 2014, Ant Group.
As a way to optimize the company’s corporate governance and achieve long-term sustainable development, Ant Group agreed to implement several adjustments, including undertaking a government-ordered overhaul to address concerns about unfair competition.
Beijing, which had been seeking to exert greater state control over the economy, had targeted Ma’s Ant Group and its sister company Alibaba for accumulating enormous wealth and allegedly abusing its dominance.
Before Ant was set to go public in 2020, China’s regulators halted its initial public offering at $34 billion, which would have been the world’s largest I.P.O. on record.
Ma previously disappeared from the public after facing trouble with the Chinese government for criticizing the nation’s banking regulators in 2019.
Ant Group shareholders agreed to “independently exercise their voting rights,” which means Ma will end an acting-in-concert pact with chairman Eric Jing, Alibaba Group Holding veteran Jiang Fang and former Chief Executive Simon Hu.
Ant Group will remove Ma’s voting control of the firm and give voting rights to 10 individuals. Ma, who controlled 53.46 percent of voting power, will now only hold 6.2 percent of the voting rights.
“No shareholder will, alone or jointly with another shareholder, have the power to control the outcome of Ant’s general meetings,” the announcement read.
“Jack Ma’s departure from Ant Financial, a company he founded, shows the determination of the Chinese leadership to reduce the influence of large private investors,” Andrew Collier, managing director of Orient Capital Research, told BBC. “This trend will continue the erosion of the most productive parts of the Chinese economy.”
Although the announcement did not note the finalization of the changes, Ant Group noted that the changes will not affect the company’s day-to-day operations. The step was deemed necessary to put the company’s IPO back on track.
“It’s definitely a clear signal that the government has eased the curbs on China’s big technology platforms”, Dai Ming, a fund manager at Huichen Asset Management in Shanghai, told South China Morning Post. “We can also say that it is a step forward for Ant to resume its listing.”