Billionaire Jack Ma to cede control of China’s Ant Group | New Technologies

Business tycoon Jack Ma, who controlled more than 50 percent of the fintech giant’s shares, will now own just 6.2 percent.

Chinese business tycoon Jack Ma will relinquish control of fintech giant Ant Group after a Communist Party coup repression about the nation’s billionaire-oriented tech sector.

The company said in a statement on Saturday that it was adjusting its ownership structure so that “the shareholders, alone or together with other parties, do not have control over the Ant Group”.

In November 2020, Ant’s initial public offering (IPO) was $37 billion, which would have been the world’s largest. it was canceled at the last minute. It led to a forced restructuring of the financial technology company and speculation that Chinese billionaires would have to cede control.

Ma indirectly controlled 53.46 percent of Ant Group’s shares, making him the “controlling person” of the company. But it will now hold just 6.2 percent of the voting rights after the adjustment, according to information in the memo.

“The adjustment is being implemented to increase the stability of our corporate structure and the sustainability of our long-term development,” Ant’s statement said.

Ten people – including the founders, management and employees – “will exercise their voting rights independently”, he said.

Capital researcher Andrew Collier told Al Jazeera that Beijing had two problems with Ma.

Collier explained that Ma is a “very well-known billionaire who controls two large companies” and that he has begun to compete with some of China’s state-owned banks, which are “the backbone of the economy”.

“For both of those reasons, they thought it was a threat and are reducing it in size.”

Ant uses Alipay, the world’s largest digital payment platform, with hundreds of millions of monthly users in China and beyond.

repression

Ma’s handover of control comes as Ant nears the end of a two-year regulation-driven restructuring, and Chinese authorities are poised to fine the company more than $1 billion, Reuters news agency reported in November.

At a summit in Shanghai, the mercury tycoon said banks were operating with a “pawn” mentality and accused financial watchdogs of stifling growth.

The expected punishment is part of Beijing’s crackdown on the country’s tech titans over the past two years, which has stripped hundreds of billions of dollars from their values ​​and reduced revenues and profits.

But Chinese authorities have softened the tone of their tech crackdown in recent months amid efforts to boost the $17 trillion economy, which has been hit hard by the COVID-19 pandemic.

“With China’s economy at a fever pitch, the government wants to signal its commitment to growth, and we know the technology and private sectors are key to that,” said Duncan Clark, president of investment advisory firm BDA China.

“At least Ant investors can [now] having a timetable for an exit after a long period of uncertainty,” said Clark, who is also the author of a book on Alibaba and Ma.

Beijing too trust Alibaba – the internet titan co-founded by Ma, which operates popular Chinese shopping platforms Taobao and Tmall – fined $2.75 billion for alleged unfair practices.

However, in a sign that the official grip is now being loosened, officials said last month Ant won approval to raise 10.5 billion yuan ($1.5 billion) for its consumer finance arm.

News of the approval sent Alibaba shares up nearly 9 percent in Hong Kong trading, and other tech companies were also boosted by hopes of an easing crackdown on the sector.

Alibaba’s latest earnings data showed a loss of 20.6 billion yuan ($3 billion) in the third quarter. The company did not release full sales figures for its Singles’ Day shopping bonanza in 2022 for the first time.

Ma has it kept a lower profile Since Ant’s failed IPO, appearances at charity events and occasional sojourns abroad.