The Chinese fintech behemoth Ant Group announced on Saturday that its founder Jack Ma will no longer be in charge of the company as it attempts to put an end to a regulatory crackdown that began soon after its enormous public market debut was derailed two years ago.
When Ant’s $37 billion IPO, which would have been the largest in history, was abruptly postponed in 2020, the financial technology giant was forced to restructure, and there was talk that the Chinese billionaire would have to relinquish control.
Although some analysts have suggested that giving up ownership could allow the company to restart its IPO, the adjustment is likely to cause further delay because of listing restrictions.
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Companies must wait three years to list on China’s domestic A-share market following a change in control. The wait is two years on Shanghai’s STAR market, which is modelled after the Nasdaq, and one year in Hong Kong.
According to Ant’s IPO prospectus submitted to the exchanges in 2020, Ma only owns a 10% share in the subsidiary of e-commerce behemoth Alibaba Group Holding Ltd. However, he has exercised control over the business through linked organizations.
According to the prospectus, Ma’s investment vehicle Hangzhou Yunbo had control over two more corporations that together own a 50.5% share in Ant. Ma and nine of Ant’s other significant shareholders, according to Ant, have decided to no longer pool their votes and instead, will each cast their votes alone. The revisions, it continued, will not alter the economic interests of Ant’s stockholders.
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Reuters estimates that Ma’s share will drop to 6.2% as a result of the modifications from his previous ownership of more than 50% of Ant’s voting rights.
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.
According to Reuters last year, Ant and Alibaba have started detaching their businesses from one another and independently seeking new business as Chinese officials frown on monopolies and unfair competition.
The move that began in the middle of last year was confirmed by Ant’s announcement on Saturday that its management will no longer participate in the Alibaba Partnership, a group that can nominate the majority of the board members for the e-commerce behemoth.
