Alibaba’s Jack Ma Said To Be Preparing To Relinquish Control Over Ant Group

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Alibaba Group Holding Ltd (NYSE:BABA) co-founder Jack Ma is poised to give up control of Ant Group, a fintech firm that’s an affiliate of Alibaba. The move comes after Chinese regulators cracked down on Ant Group, thwarting its attempt at an initial public offering worth $37 billion in 2020 and forcing it into restructuring.

Jack Ma To Cede Control Over Ant Group

Citing unnamed sources familiar with the matter, The Wall Street Journal was the first to report Ma’s plan to give up control over Ant Group as part of its move away from Alibaba. The billionaire tech boss owns only 10% of Ant.

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However, the prospectus filed with the stock exchanges for the firm's 2020 IPO reveals that Ma exercises control over the fintech firm via related entities. According to the prospectus, Hangzhou Yunbo, one of Ma's investment vehicles, controls two other entities that together own just over half of Ant Group.

For more than a year, Chinese regulators have been pressuring the fintech firm to restructure into a financial holding company. According to the Journal, the regulators didn't demand that Ma cede control over Ant Group, but they did give the move their blessing.

Unnamed sources reportedly told the Journal that Ma could relinquish control by transferring some of his voting power to Ant CEO Eric Jing and other company officials. Reuters reported in April 2021 that Ant was looking into options for Ma to divest his stake in the fintech firm, giving up control in the process.

Restructuring Ma's Empire

At the time of those discussions, Ant was restructuring amid a broad-based regulatory crackdown on the Chinese technology sector. That crackdown started following critical comments Ma made publicly about Chinese regulators during a speech he gave in October 2020.

If Ant had moved forward with its IPO, it would have been the biggest in the world, but the company was barred from going public after Ma's speech. Additionally, Chinese regulators have been carefully scrutinizing his massive tech empire that includes Alibaba, forcing a restructuring.

Although Ma was once outspoken, he has more recently been keeping a low profile. Meanwhile, regulators have ended their previous hands-off attitude in dealing with Chinese tech firms, reining them in after years of regulatory ease.