One of China’s most influential financial technology companies, Ant Group, said on Saturday that billionaire entrepreneur Jack Ma planned to relinquish control of the company.
Mr. Ma’s withdrawal from the company he founded comes after the ruling communist party waged an unprecedented crackdown on Big Tech. Beijing had Mr. Ma’s Ant Group and its sister company, the e-commerce giant, Alibaba, made the crown jewels of its online empire, early targets in the campaign to curb the power of internet giants.
Chinese officials had forced Ant Group to abandon what would have been a blockbuster IPO in 2020 and later fined Alibaba $2.8 billion for abusing its dominance. Last year, Ant Group said it would undertake a major overhaul of its company under government orders to address regulators’ concerns about unfair competition and the amount of data it collects on users.
Led by Xi Jinping, China’s top leader, Beijing has sought to exert more state control over the economy in recent years, including by reining in the influence of tycoons who amassed vast wealth but overstepped their boundaries.
Mr Ma was once lauded in China as a model of success, but he has been increasingly in trouble with the Chinese government, especially after he criticized the country’s banking regulators in late 2019. In recent years, he has largely disappeared from public view.
Ant Group said in an announcement Saturday that Mr Ma would no longer be the “controlling person” who owns 34 percent of the company’s shares. Instead, he would be one of 10 major shareholders.
The announcement, which described the move as part of a “corporate governance optimization plan”, gave no details on when the changes would be finalized and noted that they would not affect the company’s day-to-day operations. Under the current management structure of Ant Group, Mr. Ma does not hold a management position.
Ant’s flagship Alipay app is an important portal for more than 1 billion users in China who use it to pay for meals, shop on credit and build their savings. But its influence and size made it a concern for Beijing as authorities scrutinized the fintech industry for potential risks to the country’s broader financial system. Then, in 2020, shortly before Ant was due to go public, regulators abruptly halted the IPO, valued at the time at $34 billion, which would have been the largest IPO ever.
It was not immediately clear how Mr. Ma from Ant Group could affect any plans by the fintech giant to resume its IPO. But it will likely be delayed due to listing requirements. The Hong Kong stock exchange requires a one-year waiting period after a change of ownership; other markets need two or three years.
Ant Group has been working to restructure its businesses in accordance with the requirements of the Chinese authorities. Last month, regulators approved a $1.5 billion capital-raising plan for its consumer lending division, allowing a branch of the Hangzhou government to become the second-largest shareholder. The capital raise overcomes a major regulatory hurdle, allowing it to spend an estimated 500 billion yuan, or $73 billion, on consumer loans.
The approval was the latest indication that the Chinese government is ready to relax its tough stance on internet companies in a bid to jump-start economic activity in 2023.
After a long period of strict “zero Covid” lockdowns and harsh fines and regulations on Ant Group and other tech giants, Li Qiang, the Communist Party’s new No. 2 official, urged cadres at an economic meeting in December committed to improving “the digital economy” and their global competitiveness.
Zixu Wang contributed research.
