Jack Ma to cede control of China's Ant Group

Chinese billionaire Jack Ma will cede control of fintech giant Ant Group after a Communist Party crackdown on the nation’s tech sector that targeted the business magnet.

The company said in a statement on Saturday it was adjusting its ownership structure so that “no shareholder, alone or jointly with other parties, will have control over Ant Group”.

In November 2020, Ant’s $37bn initial public offering (IPO), which would have been the world’s largest, was cancelled at the last minute. It led to a forced restructuring of the financial technology firm and speculation Jack Ma would have to cede control.

The Chinese tycoon indirectly controlled 53.46% of Ant Group’s shares, making him the company’s “control person”. But now he will hold just 6.2% of the voting rights following the adjustment, according to the information in the statement.

Ant operates Alipay, the world’s largest digital payments platform, which boasts hundreds of millions of monthly users in China and beyond.

Ma’s ceding of control comes as Ant is nearing the completion of its two-year regulatory-driven restructuring, with Chinese authorities poised to impose a fine of more than $1bn on the firm.

In a speech at a summit in Shanghai, Jack Ma said banks operated with a “pawnshop” mentality and accused financial watchdogs of stifling growth.

The expected penalty is part of Beijing’s sweeping crackdown on the country’s technology titans over the past two years which has sliced hundreds of billions of dollars off their values and shrunk revenues and profits.

But Chinese authorities have in recent months softened their tone on the tech crackdown amid efforts to bolster a $17 trillion economy that has been badly hurt by the COVID-19 pandemic.

Beijing has also hit Alibaba – the internet titan co-founded by Ma that operates popular Chinese shopping platforms Taobao and Tmall – with a record $2.75bn fine for alleged unfair practices.

However, in a sign that the official grip may now be loosening, authorities said last month Ant had won approval to raise 10.5 billion yuan ($1.5bn) for its consumer finance arm.

News of the approval sent shares in Alibaba soaring almost 9% in Hong Kong trading, while other tech firms were also boosted on hopes the sector crackdown could be easing.