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Jack Ma Relinquishes Control of China’s Fintech Giant Ant Group

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Jack Ma Relinquishes Control of China's Fintech Giant Ant Group

Jack Ma the founder of Ant Group will no longer control the Chinese fintech behemoth after the company’s shareholders agreed to a series of changes that will see him relinquish most of his voting rights.

The move is yet another significant development after a regulatory crackdown derailed Ant’s US$37 billion (S$49.4 billion) IPO in late 2020, forcing the financial technology behemoth to restructure. Alipay, the world’s largest mobile payment platform, is owned by the Ant group and serves over 1.3 billion users and 80 million merchants.

According to Ant’s IPO prospectus, while Jack Ma owns only a 10% stake in Ant, an e-commerce giant Alibaba Group Holding affiliate, he exercised control over the company through related entities.

According to the prospectus, Hangzhou Yunbo, Ma’s investment vehicle, controlled two other entities with a combined 50.5 percent stake in Ant. Ant announced that Jack Ma and 9 major shareholders agreed to no longer vote in concert and would instead vote independently.

According to Reuters calculations, Ma previously held more than 50% of Ant’s voting rights, but the changes will reduce his share to 6.2%.

Read: Jack Ma Spotted a Muay Thai Match at Bangkok

Ant also announced that it would add a fifth independent director to its board, making independent directors the majority of the company’s board. It currently has eight directors on its board.

“As a result, a direct or indirect shareholder will no longer have sole or joint control over Ant Group,” the company said.

Reuters reported in April 2021 that Ant Group was looking into ways for Ma to sell his stake in the company and relinquish control.

According to the Wall Street Journal, which cited unnamed sources, Ma could cede control by transferring some of his voting power to Ant officials, including chief executive Eric Jing, in July last year.

Ant’s Hong Kong and Shanghai market listings were halted just days after Ma publicly chastised regulators in a speech in October 2020. Since then, his vast empire has been scrutinized by regulators and is being restructured.

Ant runs the world’s most popular mobile payment app, Alipay, which has over one billion users.

Ma, who was once outspoken, has kept a low profile in the past two years as regulators have reined in the country’s tech titans and phased out the laissez-faire approach that drove breakneck growth.

“Jack Ma’s departure from Ant Financial, which he founded, demonstrates the Chinese leadership’s determination to limit the influence of large private investors,” according to the managing director of Orient Capital Research, Andrew Collier.

“This trend will exacerbate the deterioration of the Chinese economy’s most productive sectors, Collier said”

As Chinese regulators crack down on monopolies and unfair competition, Ant Group and Alibaba have been untangling their operations and seeking new business independently, according to Asia One last year.

On Saturday, Ant Group announced that its management would no longer serve in partnership with Alibaba, a body that can nominate the majority of the e-commerce giant’s board of directors, confirming a change that began in the middle of last year.

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