Posted ByTechViewThe decision is yet another significant milestone following a regulatory crackdown that scuttled Ant’s $37 billion IPO in late 2020 and forced the financial technology powerhouse to restructure.
Hong Kong, China: Ant Group founder Jack Ma will no longer control the Chinese fintech behemoth after the company’s shareholders agreed to a series of changes that would see him relinquish most of his voting rights, the company said on Saturday.
The decision is yet another significant milestone following a regulatory crackdown that scuttled Ant’s $37 billion IPO in late 2020 and forced the financial technology powerhouse to restructure.
“The resignation of Jack Ma from Ant, the firm he established, demonstrates the Chinese leadership’s intention to limit the power of huge private investors. This tendency will exacerbate the deterioration of the Chinese economy’s most productive sectors “Orient Capital Research’s Managing Director, Andre Collier, is based in Hong Kong.
“Despite official statements, Ant presented little harm to the financial system and was effective in arranging loans for small firms, which are one of the key drivers of economic development,” he noted.
Duncan Clark, Chairman of the Beijing-based Investment Advisory Firm BDA, stated, “Yes, he is no longer the dominant shareholder, which is obviously important. In principle, this should open the road for an IPO, if the second crucial problem – data oversight/ownership – is also overcome.”
The change is being made to “further strengthen the stability of our corporate structure and the sustainability of our long-term development,” according to an Ant statement.
It stated that ten persons, including the founder, management, and staff, would “use their vote rights independently.” The move would have no effect on the economic interests of any stockholders.
Ant’s planned IPO would have been a world-record listing at the time, and its disastrous withdrawal occurred as Ma’s other business holdings were being scrutinised by the government.
Beijing also slapped a record $2.75 billion punishment on Alibaba, the internet juggernaut co-founded by Ma that controls popular Chinese retail sites Taobao and Tmall. With the Chinese economy in such turmoil, the government is seeking for ways to demonstrate its commitment to growth, and the tech/private sectors, as we all know, are critical to this. After a protracted period of uncertainty, Ant investors finally have a timeframe for leaving.”
“If these voting arrangement adjustments are regarded a change-of-control event under the A share and/or Hong Kong listing regulations, Ant Group’s IPO process may be further delayed,” Weiheng Chen, Partner and Head of Greater China Practice at law firm Wilson Sonsini in Hong Kong, said.