Fintech

Billionaire Jack Ma to give up control of Ant Group—China’s biggest fintech platform

Jack Ma​, Alibaba co-founder and chairman

Jack Ma, Alibaba co-founder and chairman (File photo)

Photo : IANSHINDI

Jack Ma, the once-celebrated Chinese entrepreneur, who built the gargantuan Alibaba Group and also China’s biggest fintech platform Ant Group, will no longer control the latter, reported Reuters.

Ant Group on Saturday said the company’s shareholders agreed to adjust the shareholding rights of the founder, management and employees. The adjustment would see Ant Group’s co-founder’s voting rights reduced to 6.2% from 50%, according to the report.

The development follows a massive crackdown by China on its tech and financial sector entities in the last two years amid accusations of predatory lending and disproportionate control by over the economy.

The flamboyant Chinese billionaire, who built the e-commerce giant Alibaba from scratch, has all but retreated from public view after criticising Chinese regulators on the eve of Ant IPO, which was later cancelled.

According to the report, Ant will give independent voting rights to 10 top individuals, including Ma, effectively taking away controlling voting rights from the founder; however, the adjustments will not change the economic interests of any parties involved.

Ma owns a 10% stake in Ant Financial, an affiliate of Alibaba Group Holding Ltd, but controlled the fintech platform through related entities, the report added.

Following the crackdown by Chinese authorities, Ant Financial has made sweeping changes to its business operations to assuage the regulators. The changes include increasing the capital base of its consumer loans entity and demarcating businesses of Ant from Alipay to name a few.

The latest change in voting rights also means that Ant’s IPO, which was the world’s largest at USD 34.5 billion in 2020, will get further delayed, since companies which implement a controller change cannot list for a period of three years from the date of the change, as per capital market rules in China.

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