No one will have overall control after the change says Ant group

Key Takeaways:

• The billionaire founder of Ant Group, Jack Ma, will lose control of the Chinese fintech behemoth following a regulatory crackdown.
• Cash, checks, and credit cards have been replaced by Ant Group’s Alipay as the country’s main online payment method.
• Ant asserted that shareholders would no longer combine their votes and only vote independently.

After a regulatory crackdown, Ant Group’s billionaire founder Jack Ma will lose control of the Chinese fintech giant.

According to Ant Group, no one would have overall control following the change.

Since criticising China’s financial sector in 2020, the formerly flamboyant Mr Ma has hardly ever been seen in public.

The planned stock market flotation of Ant Group was abruptly discontinued in response to that criticism.

Alipay’s primary online payment system in China is operated by Ant Group and has supplanted cash, checks, and credit cards.

Founder of the massive e-commerce site Alibaba and former English teacher Mr Ma have direct and indirect ownership interests in Ant Group, totalling more than 50%.

However, according to a statement from Ant Group, his control will only be slightly more than 6% following the changes in the governance structure.

Ant’s planned £26 billion stock market IPO in November 2020, which would have been the biggest ever, was abruptly postponed.

Late in the game, Chinese authorities cited “major issues” with the firm’s regulation.

Some analysts believed it to be a move by the Chinese government to bring down a company that had grown too strong and a leader who had become too outspoken.

The regulatory action followed Mr Ma’s assertion at a financial conference that traditional banks had a “pawn-shop mentality.”

He also praised the advantages of the digital banking system and emphasised that future lending decisions should be made using data rather than collateral.

After the stock market flotation that was supposed to make Mr Ma the richest man in China failed, he vanished for three months, sparking questions about his whereabouts.

Reports state that he eventually reappeared, but since then, he has stayed out of the public eye.

Ant Moves

Mr Ma has a stake in Ant and works with other shareholders to control it.

However, Ant claimed shareholders had decided to only vote independently going forward and would no longer combine their votes.

Additionally, the shareholding structure will alter.

The economic interests of shareholders, according to Ant, won’t alter.

As per Andrew Collier, managing director of Orient Capital Research, “Jack Ma’s departure from Ant Financial, a firm he established, shows the determination of the Chinese leadership to decrease the influence of large private investors.”

The most effective sectors of the Chinese economy will resume deteriorating due to this trend.

According to the Reuters news agency, Ant Group is almost finished with a two-year restructuring that regulators forced. Chinese authorities are ready to fine the company more than $1bn.

The anticipated fine is a component of a comprehensive crackdown on China’s technology behemoths that has decreased their value by hundreds of billions of dollars and their revenues and profits over the past two years.

The authorities have recently toned down their rhetoric to support the Chinese economy, which has been negatively impacted by the Covid pandemic.