Last Updated on January 7, 2023 by Bitfinsider
Ant Group founder Jack Ma will relinquish leadership of the Chinese fintech behemoth in an overhaul aimed at putting an end to a regulatory onslaught that began shortly after Ant Group’s huge public market launch was thwarted two years ago.
Ant’s $37 billion IPO, which would have been the world’s largest, was canceled at the last minute in November 2020, forcing the financial technology giant to restructure and raising rumors that the Chinese billionaire might have to lose control.
While some experts believe that losing ownership might pave the way for the company’s IPO to be revived, the adjustments made by the group on Saturday are likely to cause a further delay owing to listing rules.
Companies must wait three years following a change in control before listing on China’s domestic A-share market. On Shanghai’s Nasdaq-style STAR market, the wait is two years, while in Hong Kong, it is one year.
Ma, a former English teacher, formerly had more than 50% of Ant voting rights, but the reforms will reduce his portion to 6.2%, according to Reuters estimates.
According to Ant’s IPO prospectus filed with the markets in 2020, Ma only has a 10% interest in Ant, an affiliate of e-commerce giant Alibaba Group Holding Ltd 9988.HK>, but has exerted influence over the firm through associated organizations.
According to the prospectus, Hangzhou Yunbo, Ma’s investment vehicle, controlled two additional corporations that had a combined 50.5% ownership in Ant.
Ma’s handover comes as Ant nears the end of its two-year regulatory-driven reorganization, with Chinese regulators preparing to levy a punishment of more than $1 billion on the company, according to Reuters in November.
The predicted punishment is part of Beijing’s vast and unprecedented crackdown on the country’s technological titans over the last two years, which has reduced their valuations by hundreds of billions of dollars and reduced sales and earnings.
However, Chinese authorities have recently eased their stance on the tech crackdown in order to support a $17 trillion economy that has been severely harmed by the COVID-19 outbreak.
“With the Chinese economy in a frenzy, the government is eager to express its commitment to growth, and the tech and private sectors, as we know, are critical to that,” said Duncan Clark, head of investment company BDA China.
“At least Ant investors now have a timeframe for a departure after a lengthy period of uncertainty,” said Clark, who previously wrote a book on Alibaba and Ma.
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