Jack Ma, founder of the Chinese internet company Alibaba, will reportedly transfer his control rights in Ant Group, the digital financial services company he founded.
In the statement made by the company, it was reported that instead of the decision structure in which Ma has active control with 53.46 percent share with the company’s Chairman and Senior Manager Eric Cing, former Senior Manager Simon Hu and Alibaba Group Manager Jiang Fang, a new structure will be established in which the right to control is collected in 10 stakeholders acting independently.
In the statement, it was stated that in the new structure, the investment partnership formed by Ma and 4 stakeholders will have 31.04 percent, the investment partnership formed by Cing and 4 stakeholders will have 22.4 percent voting rights, and the voting rights of other partners will remain at 46.4 percent.
Emphasizing that the main shareholders will exercise their voting rights independently, the statement said, “No shareholder, alone or with another shareholder, will have the power to determine the decisions of Ant’s board of directors, to appoint the majority of directors, and therefore will not have control over Ant.”
In the statement, it was noted that the regulation will not affect the share distribution and economic interests of the partners.
With the arrangement, Ma’s direct control over the company will end.
The company’s public offering on the Hong Kong and Shanghai stock exchanges was halted
Ma, the founder of Chinese internet company Alibaba, mysteriously disappeared in October 2020 after a speech criticizing China’s market regulators and state-owned banks.
Following the incident, the government halted the planned dual IPO of Alibaba’s online payment service Alipay and related assets under the same roof, Ant Group, which was expected to raise $39.7 billion in October 2020 on the Hong Kong and Shanghai stock exchanges.
In China, the central government had increased its inspections and regulatory interventions for internet companies from the end of 2020.
The China Securities Regulatory Commission (CSRC) required internet companies that control large amounts of user data to undergo a security investigation to be offered to the public abroad.
China’s State Administration for Market Regulation (SAMR) had targeted the country’s major internet companies such as Alibaba, Meituan, Baidu and Didi in investigations launched on the grounds of violating the anti-monopoly law.
In April 2021, SAMR fined Alibaba a record $2.8 billion in a monopolization investigation. The company was asked to end its non-competitive practices related to mobile payment platform Alipay and improve users’ data security.
Following the fine, the company was working to reorganize the organization and company structure of online payment, credit, insurance and similar services.
While the new regulations are expected to pave the way for the company’s IPO, the timing will be postponed. The Shanghai Stock Exchange, where Ant Group is planning an IPO, requires at least 3 years for the shares of companies with a changed control structure to be traded, while the Hong Kong Stock Exchange requires at least 1 year.
