Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Billionaire Jack Ma plans to cede control of China's Ant Group - WSJ

Published 07/28/2022, 06:24 AM
Updated 07/28/2022, 11:42 AM
© Reuters. FILE PHOTO: Alibaba Group co-founder and executive chairman Jack Ma attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China, September 17, 2018. Picture taken September 17, 2018.  REUTERS/Aly Song/File Photo/File Photo

HONG KONG/BEIJING (Reuters) -Chinese billionaire Jack Ma plans to cede control of Ant Group, the Wall Street Journal reported on Thursday, after a regulatory crackdown that scuppered its $37 billion IPO in 2020 and led to a forced restructuring of the financial technology behemoth.

While Ma only owns a 10% stake in Ant, an affiliate of Alibaba (NYSE:BABA) Group Holding Ltd, he exercises control over the company through related entities, according to Ant's IPO prospectus filed with the exchanges in 2020.

Hangzhou Yunbo, an investment vehicle for Ma, has control over two other entities that own a combined 50.5% stake of Ant, the prospectus showed.

The Journal said, citing unnamed sources, that Ma could cede control by transferring some of his voting power to Ant officials including Chief Executive Eric Jing.

Ant has informed regulators of Ma's intention as it prepares to restructure into a financial holding company, the report said, adding regulators didn't demand the change but have given their blessing.

Ant and Alibaba did not immediately respond to Reuters requests for comment.

Shares in U.S.-listed e-commerce giant Alibaba slipped 1.2% to $101.51 in premarket trade after briefly jumping higher.

In April last year, Reuters reported that Ant was exploring options for Ma to divest his stake in Ant and give up control.

The discussions at that time came amid a revamp of Ant and a broader state clampdown on China's technology sector that was set in motion after Ma's public criticism of regulators in a speech in October 2020.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

Ant's IPO, which would have been the world's largest, was derailed days after the speech and Ma's sprawling empire has been under regulatory scrutiny and going through a restructuring since then.

Ant operates the world's largest and China's ubiquitous mobile payment app Alipay, which has more than 1 billion users.

Once outspoken, Ma has kept an extremely low public profile as regulators reined-in the country's technology giants after years of a laissez-faire approach that drove breakneck growth.

"It's been on the cards for a while," said Danni Hewson, financial analyst at AJ Bell.

"There will be some who will think that potentially this clears the way for Ant to put the past few years behind it and try to get out on the front foot. There will be others who will be deeply concerned about what comes next because Jack Ma has been such a powerhouse."

A change in control at Ant could slow plans to revive its long-sought IPO, the Journal reported, as China's domestic A-share market requires companies to wait three years after a change in control to list.

The wait is two years on Shanghai's STAR market, and one year in Hong Kong.

Earlier this week, Alibaba's annual report revealed that Ant executives are no longer part of Alibaba Partnership, a body that can nominate the majority of the e-commerce giant's board, as the pair decouple to appease regulators.

Ant and Alibaba are also untangling their operations from each other and independently seeking new business, Reuters reported last month, citing sources.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

Latest comments

Never trust the corrupt Chinese Communist party who squash free enterprises like Ant and Alibaba.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.