Ant Group said its founder Jack Ma will no longer control the Chinese fintech giant, as the firm seeks to draw a line under a regulatory crackdown that was triggered soon after its mammoth stock market debut was scuppered two years ago.
Ant’s US$37 billion IPO, which would have been the world’s largest, was cancelled at the last minute in 2020, leading to a forced restructuring of the financial technology behemoth and speculation the Chinese billionaire would have to cede control.
While some analysts have said a relinquishing of control could clear the way for the company to revive its IPO, the change is likely to result in a further delay due to listing regulations.
China’s domestic A-share market requires companies to wait three years after a change in control to list. The wait is two years on Shanghai’s Nasdaq-style STAR market, and one year in Hong Kong.
Ma only owns a 10 percent stake in Ant, an affiliate of e-commerce giant Alibaba Group Holding, but has exercised control over the company through related entities, according to Ant’s IPO prospectus filed with the exchanges in 2020.
Hangzhou Yunbo, an investment vehicle for Ma, had control over two other entities that own a combined 50.5 percent stake of Ant, the prospectus showed.
Ant said that Ma and nine of its other major shareholders had agreed to no longer act in concert when exercising their voting rights, and would only vote independently. It added that the shareholders’ economic interests in Ant will not change as a result of the adjustments. Ma previously possessed more than 50 percent of voting rights at Ant but the changes will mean that his share falls to 6.2 percent, according to Reuters calculations.
Ant also said it would add a fifth independent director to its board so that independent directors will comprise a majority of the company’s board. It currently has eight board directors.
“As a result, there will no longer be a situation where a direct or indirect shareholder will have sole or joint control over Ant Group,” it said in its statement.
The Wall Street Journal reported in July last year, citing unnamed sources, that Ma could cede control by transferring some of his voting power to Ant officials including Chief Executive Officer Eric Jing.
Ant said on Saturday that its management would no longer serve in the Alibaba Partnership a body that can nominate the majority of the e-commerce giant’s board, affirming a change that started the mid-last year.
Source: Reuters
