Jack Ma, the billionaire founder of Ant Group, is set to relinquish control of China’s fintech giant after a crackdown by the country’s regulators.
Ant Group said that after the change, no one would have full control of the group.
Ma, once known for his raucous public appearances, has become a rarity to see since his criticism of China’s financial sector in 2020.
After this criticism, the planned flotation of “Ant Group” shares on the stock exchange came to an abrupt halt.
Ant Group operates Alipay, China’s main online payment system, which has outperformed paying by cash, check or credit card.
Ma, a former English language teacher who founded the e-commerce giant Alibaba, directly and indirectly controls more than 50 percent of the Ant Group.
But after changes in the group’s regulatory framework, he will control just over 6 percent of the shares, the group said in a statement.
And in November 2020, the £26bn Ant Group stock market flotation, which would have been the world’s largest, was canceled at the last minute.
Chinese authorities at the time cited “major issues” related to the organization of the company.
Some analysts saw it as an attempt by the Chinese government to subjugate a company that had become too powerful and its president, who had become very vocal in his criticism of the authorities.
The regulatory intervention came after Ma said at a financial conference that traditional banks had a “pawn shop mentality”.
Ma also praised the advantages of the digital banking system at the time, and stressed that future lending decisions should be based on data rather than collateral.
After the stock market crash, which was set to make Ma the richest person in China, he disappeared for three months, prompting speculation about his whereabouts.
Ma resurfaced but has been avoiding the limelight ever since.
Ma controls Ant Group through its shareholding and by acting in concert with other shareholders.
But the group said shareholders agreed to no longer work together when using voting rights, and would only vote independently.
The shareholding structure of the group will also change.
But Ant Group said the economic interests of shareholders would not change.
“Jack Ma’s departure from Ant Financial, a company he founded, shows the determination of the Chinese leadership to limit the influence of large private investors,” said Andrew Collier, managing director of Orient Capital Research.
“This trend will continue to erode the most productive parts of the Chinese economy,” he added.
Ant Group is nearing completion of a two-year regulator-led restructuring, and Chinese authorities are preparing to fine the company more than $1 billion, according to Reuters news agency.
The expected punishment is part of a sweeping crackdown on China’s tech giants over the past two years, which have slashed hundreds of billions of dollars in valuations and slashed revenue and profits.
But the authorities have recently softened their tone amid efforts to boost China’s economy, which has been hit by the Covid pandemic.