Jack Ma To Give Up Control Of Fintech Giant Ant Group
According to the latest news, the billionaire founder Jack Ma is all set to give up control of the Chinese fintech giant, Ant Group after a regulatory crackdown. This move has been taken after the firm’s shareholders agreed to implement a series of adjustments that will see him give up most of his voting rights.Ant Group even stated that after the change, no one can have overall control. The formerly exuberant Mr. Jack Ma has been seen seldom in public since criticizing China’s financial sector in 2020. The bad part was that Ant Group’s planned stock market flotation was abruptly halted following the criticism.
Ant Group actually runs Alipay which is the main online payment system in China. Let me tell you that Alipay has eclipsed cash, cheques, and credit cards. Mr. Ma was actually a former English teacher who founded e-commerce giant Alibaba, which directly and indirectly controls more than 50% of Ant Group.
The bad piece of news for him is that after the changes in governance structure, Jack Ma will control just over 6%.It has been said in an Ant Group statement.
Ant Group’s £26bn stock market flotation which would have been the world’s largest one, was canceled at the last minute back in Nov 2020. The fact was that Chinese authorities cited “major issues” over regulating the firm at the eleventh hour. Some analysts even see it as an attempt by the Chinese government in order to humble a company that had become too powerful and a leader who had become quite outspoken.
The regulatory intervention came when Mr. Ma had told a financial conference that traditional banks had a “pawn-shop mentality”. He even lauded the merits of the digital banking system and was quite stressed that future lending decisions would be based on data, not collateral. Due to the collapse of the stock market flotation, he even disappeared for three months.
Ant Group said shareholders’ economic interests will not change. Andrew Collier, managing director of Orient Capital Research stated:The penalty is actually a part of a sweeping crackdown on China’s technology giants over the past two years that have cut hundreds of billions of dollars off their values and shrunk revenues and profits.