Billionaire Jack Ma is reportedly planning to give up reins of the Ant Group, as specified by reports from Thursday, July 28. Turns out, this was following a regulatory repression that led to the submerge of its $37 billion IPO two years ago. Moreover, it also resulted in a forceful restructuring of the Chinese fintech giant.
Despite holding only 10% in the company, which is an affiliate of the Alibaba Group, Ma holds the administrative powers over Ant by means of several connections. This was revealed by the IPO prospectus that the company filed with exchanges in the year 2020.
Hangzhou Yunbo, which acts an investment vehicle for the billionaire holds the control of two more organisations that together hold a stake of 50.5% in Ant Group. Moreover, the report specified how the billionaire could give up the controls through the transfer of some of his powers of voting to executives of the company such as CEO Eric Jing.
The fintech giant conveyed the billionaire’s intention to the regulators as it gets ready for the restructuring into a financial holding giant. Further, the report specified how regulators had not demanded this alteration but had indicated that they were okay with it.
Current situation of the fintech company:
In premarket trading, shares in the e-commerce giant listed in the United States dropped by 1.2% to $101.51 following a slight increase. In 2021 summer, Ant was reportedly look at ways for the billionaire get rid of his stake in the company. During this juncture, Ant witnessed a solid revamping and crackdown on the Chinese tech industry that came about following Ma criticising regulators a couple of years ago. This speech had a profound impact on the IPO leading to intense scrutiny from the regulators.
Following these developments, Ma has maintained a rather low profile in the public as regulators kept on scrutinising the tech sector in China. This was following the considerable growth the industry saw after a prominent prevalence of the laissez-faire approach by the companies.
Expectantly, this alteration for the tech giant could hinder plans for the revival of the IPO it has been aiming for. This is as the Chinese stock market puts forward requirement for tech giants to take three full years to continue an IPO following such an alteration in its controls. In the STAR market of Shanghai, the wait is about 24 months long.
Recently, the yearly for e-commerce giant Alibaba disclosed that officials of Ant are not a part of the Alibaba Partnership anymore. This organisation had the power to nominate the larger art of the board of the company.