As the Wall Street Journal reported on July 28, Alibaba founder Jack Ma will pass over his fintech giant Ant Group.
Sources told the outlet Ma might relinquish control by giving some of his voting authorities to Ant executives, such as Chief Executive Eric Jing. He may also transfer some of his stakes to them.
This change could be another crux of the regulatory saga surrounding Ant Group since Beijing halted its 35 billion dollars initial public offering two years ago. This came after Ma openly criticized regulators. The Chinese fintech giant was later forced to restructure.
According to Ant’s IPO prospectus filed with the exchanges in 2020, Ma holds 10% of Ant’s stakes. He controls Ant via Hangzhou Yunbo Investment Consultancy Company. It is responsible for two entities holding more than half of Ant’s shares.
The leadership changes did not come from regulators. Sources said Ma is giving up on his power as Ant is bracing to become a financial holding company. He has spent years thinking about the hazards of corporate governance that depend too much on one person to lead the company.
Previously, Ma refrained from ceding control of Ant so as not to jeopardize the company’s prospects for an initial public offering. The halted IPO of world history changed the plans.
Ant used to be a close affiliate of Ma’s Alibaba. But after Beijing’s crackdown, Ant executives have separated from Alibaba Partnership, which has the power to appoint the bulk of the board members for the e-commerce behemoth.
As sources told the Journal, Ant is not looking for another IPO intention at the moment.
Danni Hewson, financial analyst at AJ Bell, told Reuters, “There will be some who will think that potentially this clears the way for Ant to put the past few years behind it and try to get out on the front foot. There will be others who will be deeply concerned about what comes next because Jack Ma has been such a powerhouse.”