- Kyle Chua
Jack Ma Cedes Control of Ant Group Amid Major Restructuring
Ant Group announced in a statement that it's now undergoing a major restructuring after Jack Ma agreed to give up most of his voting rights in the company.
Ma reportedly only owns a 10% stake in Ant, but has managed to exercise control through his investment vehicle Hangzhou Yunbo, which split control between two entities that own a combined 50.5% stake. However, once the change in governance takes effect, his stake will be reduced o a little over 6%.
Ant announced it will add a fifth independent director to its board. It currently has eight board directors. “As a result, there will no longer be a situation where a direct or indirect shareholder will have sole or joint control over Ant Group,” the company said.
Ant also said its shareholders' economic interests will not change once the restructuring is complete.
The new development comes as Ant nears the completion of its two-year restructuring, with Chinese authorities to impose a fine of more than US$1 billion on the company, according to Reuters.
In November 2020, authorities suspended Ant's US$37 billion initial public offering (IPO) in Hong Kong and Shanghai, which would have been the world's largest, at the last minute, citing "changes in financial technology regulatory environment". Ant was then forced to restructure, with rampant speculation that Ma would have to cede control if the company hoped to comply with regulations. The move was seen by analysts as a message that no private business can become that powerful without the help of the Chinese government.
The restructuring could help Ant revive its IPO ambitions, though the company said it has no plans to do so again and will instead focus on business optimisation.
Ant owns Alipay, the leading online payment platform in China, which has since become more ubiquitous than cash, checks and credit cards.
Chinese fintech giant Ant Group announced its founder Jack Ma is giving up most of his voting rights in the company amid a major restructuring.
His control will be reduced to a little over 6% from more than 50%, once the change in governance takes effect.
Ant also announced it will add a fifth independent director to its board.