Jack Ma
Alibaba co-founder Jack Ma has withdrawn from his businesses and the limelight since an ill-timed speech critical of Chinese policy and banks in 2020. © AFP via Getty Images

Chinese billionaire Jack Ma is to relinquish control of Ant Group, the fintech company revealed on Saturday, as its founder continues his withdrawal from his online businesses following Beijing’s tech crackdown.

Ma will see his voting rights shrink from above 50 per cent to 6.2 per cent, according to calculations based on a statement from the online payments and loans provider. The planned change of control, first reported last July, would help release the company from the limbo it has experienced since an intended IPO was pulled at the last minute in November 2020.

A change in control starts the clock on Ant having to wait a year before it can attempt a fresh listing in Hong Kong, or two years for the high-tech STAR board in Shanghai. But the timeline could be delayed if other regulatory requirements are not met.

Ma also co-founded leading ecommerce company Alibaba and separated the Ant payments business from it in 2011. Ma’s status in the companies has been in jeopardy since he gave an ill-timed speech criticising Chinese regulators and the country’s state-owned banks on the eve of Ant’s IPO.

The speech led President Xi Jinping to force the abandonment of Ant’s listing and triggered a regulatory crackdown on the country’s largest tech groups. Ma was forced to retreat from the limelight. He has increasingly spent his time outside China, most recently living in Tokyo for many months.

The changes being implemented mean Ant will have no ultimate controller, the company said, adding that independent directors — who include Laura Cha, the Hong Kong stock exchange chair — would make up more than half of the board.

“As a result of the adjustment, the shareholding structure of Ant Group will be more transparent and diversified, which will facilitate the steady development of the company,” it said, adding the changes would not affect its daily operations.

Ant has been forced to restructure over the past two years and outstanding issues include further boosting the capital base of its consumer loan unit, gaining the proper licences for its credit scoring unit and getting approval for its plan to turn into a financial holding company.

Analysts said the change in control would represent a significant step forward for the “rectification” process demanded by China’s top financial regulators.

Li Chengdong, head of internet think-tank Haitun, said the handing over of control probably indicated a conclusion of the regulatory investigations of Ma and the fintech group.

“The next step is starting to talk about the IPO, but the chances of that in the mainland are probably not high, Hong Kong is more likely because domestic regulators are prioritising ‘hard tech’ IPOs and still not encouraging fintech groups,” he said.

Duncan Clark, founder of the Beijing-based BDA Consultancy, said the government had been working to reassert control over the sector. “Jack ceding control is likely the culmination of the campaign,” he said. “The need to restore investor confidence and stimulate growth likely now outweigh everything.”

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