It’s official. Jack Ma, the founder of Chinese giants Alibaba and Ant Group, will cede control of his fintech company after two years of very strict regulation initiated by Beijing.
The billionaire has gone from adored figure to persona non grata in his native country.
Targeted by Beijing
In November 2020, as Ant Group prepared to complete the largest IPO in history, the Chinese authorities decided to suspend the operation. In question, statements by its founder, Jack Ma, considered far too critical of them. According to analysts, this decision allowed Beijing to rein in the company, which had become too powerful for its liking. As a reminder, Ant Group operates Alipay, the main online payment system in China, which has eclipsed cash, checks and credit cards.
This event marked the beginning of a huge wave of regulation in the country. While it targeted the entire tech sector, Jack Ma’s companies were particularly targeted: Alibaba was fined a record 2.3 billion euros for anti-competitive practices, while Ant Group was forced to announce its complete restructuring.
Upstream, Jack Ma disappeared from radar for many months before briefly reappearing. He has now gone into exile in Tokyo, while the government continues to monitor his businesses very closely.
Ant Group is about to complete its restructuring
It is within the framework of the restructuring of Ant Group, forced by the authorities, that Jack Ma gives up control of the company. Until then, he had more than 50% of the voting rights at Ant Group, a figure which will now drop to 6.2%. The company explained that Jack Ma would no longer be the ” control person holding 34% of the shares of the company, but one of the ten main shareholders of this one.
Beijing’s regulation has hurt the company very badly, which has seen its value drop drastically. Despite this, it hopes to retry an IPO on the Hong Kong Stock Exchange once its restructuring is complete, but will have to wait to achieve this: the latter requires a one-year waiting period after a change of ownership. For Jack Ma, it’s the end of a long epic. A former English teacher, he was presented, in 2004, as one of the ” ten best businessmen of the year ” in China.
Source : BBC
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