Jack Ma, the founder of Ant Group and a billionaire in his own right, will step down as CEO due to pressure from Chinese regulators.
According to Ant Group, every person or group will only control the company once the transition is made.
In 2020, Mr. Ma made headlines by publicly criticizing China’s financial sector. Since then, he has been rarely seen in public.
After hearing such feedback, Ant Group’s planned IPO on the stock market was shelved.
Alipay, operated by Ant Group, is China’s preferred method of making online payments, surpassing those made via cash, checks, or credit cards.
Mr. Ma, the ex-English-teacher-turned-entrepreneur who founded e-commerce giant Alibaba, has direct and indirect control over more than 50% of Ant Group.
An Ant Group statement claims that after the changes in governance structure, he will control slightly more than 6%.
Ant’s planned £26 billion stock market flotation in November 2020, which would have been the largest in history, was abruptly canceled due to market volatility.
Late in the game, Chinese officials cited “major issues” with the company’s regulation.
An attempt to curb the power of a company and its outspoken leader was seen by some experts as a move on the part of the Chinese government.
Mr. Ma’s comments at a financial conference about the “pawn-shop mentality” of conventional banks prompted the intervention of regulators.
He also praised the benefits of online banking and emphasized the importance of data over collateral in future credit decisions.
Mr. Ma was supposed to become the wealthiest person in China after a stock market flotation, but after it failed, he vanished for three months, leaving his whereabouts a mystery.
There were reports that he would reappear at some point, but he has been trying to stay out of the public eye ever since.
Mr. Ma uses his stake and the cooperation of other shareholders to exert control over Ant.
However, Ant claimed that shareholders had decided to stop cooperating and exercise their voting rights individually in the future.
Alterations will also be made to the ownership structure of the company.
But Ant assured investors that their financial interests would remain the same.
Chinese authorities are reportedly planning to fine Ant Group more than $1 billion as part of a two-year restructuring forced by regulators, as reported by the Reuters news agency.
The anticipated fine is a part of a larger crackdown on China’s tech giants over the past two years, which has slashed hundreds of billions of dollars from their values and reduced revenues and profits.
Recent efforts to stabilize the Chinese economy, which the Covid pandemic has hit, have led to a softer stance on the part of the authorities.