will give up Jack Ma The founder of the Ant Group has been seizing control of the Chinese fintech giant in an overhaul that seeks to draw a line under a regulatory crackdown launched shortly after it scrapped its massive stock market debut two years ago.
And Ant’s $37 billion IPO, which would have been the world’s largest, was canceled at the last minute in November 2020, prompting a forced restructuring of the fintech company and speculation that the Chinese billionaire would relinquish control.
And while some analysts said relinquishing control could pave the way for the company to revive its initial public offering, the changes announced by the group on Saturday are likely to lead to further delays due to listing regulations, while China’s local stock market requires companies to wait three years after A change in listing control, with a wait of two years in the STAR Market in Shanghai similar to the Nasdaq, and one year in Hong Kong.
The former English teacher previously held more than 50% of the voting rights in Ant, but the changes will mean his stake drops to 6.2%, according to Archyde.com calculations. Ma owns only a 10% stake in Ant, a subsidiary of the Alibaba Group. The e-commerce giant Group Holding Ltd, but has exercised control of the company through related entities, according to Ant’s IPO prospectus filed with the exchanges in 2020.
The prospectus showed that Hangzhou Yunbo, an investment vehicle of Ma, controls two other entities that hold a combined 50.5% stake in Ant. regulators, as Chinese authorities prepare to fine the company more than $1 billion, Archyde.com reported in November.
The expected punishment is part of Beijing’s sweeping and unprecedented campaign against the country’s tech giants over the past two years that has slashed hundreds of billions of dollars in valuations and slashed revenues and profits.
But in recent months, Chinese authorities have softened their tone on tough measures related to technology amid efforts to boost the $17 trillion economy that has been hit hard by the COVID-19 pandemic. Feverish, the government is looking to signal its commitment to growth, and technology and the private sector are key to that as we know.”
Regulatory audit
Ant operates China’s mobile payment app Alipay, the world’s largest, with more than 1 billion users. Ant, whose business also includes consumer lending and distribution of insurance products, said Ma and 9 other major shareholders had agreed not to operate. Coordinating any longer when exercising voting rights, they would only vote independently.
She added that the economic interests of Ant shareholders would not change as a result of the amendments. Ant also said that it would add a fifth, independent director to its board of directors so that the independent directors would form the majority of the company’s board members. It currently has eight board members.
“As a result, there will be no situation where a direct or indirect shareholder will have sole or joint control of Ant Group,” it said in its statement. Archyde.com reported in April 2021 that Ant was exploring options for Ma, one of its most successful and influential businessmen. In China, to give up its stake in Ant and relinquish control.
The Wall Street Journal reported in July last year, citing unnamed sources, that Ma could relinquish control by transferring some of his voting powers to Ant officials including CEO Eric Ging.