After Sharp Criticism of Authorities' Regulation, Focused Crackdown
IPO Process Virtually Halted Amid Ownership Changes
Some Predict "Rather Accelerated Listing"
[Asia Economy Beijing=Special Correspondent Kim Hyun-jung] Jack Ma, the founder of Chinese tech company Alibaba, has lost control over Ant Group, the country's largest fintech (financial technology) company.
According to local media such as Caixin on the 8th, Ant Group announced the results of a voting rights adjustment on the 7th through a notice on its website, which centered on Jack Ma losing control. Previously, voting rights were exercised jointly by Ant Group, but through this adjustment, 10 individuals including the group's management, employee representatives, and Jack Ma will each exercise voting rights independently.
As a result, Jack Ma's voting rights have decreased from 53.46% to only 6.2%. Until now, Jack Ma's personal shareholding in Ant Group was only 10%, but he effectively controlled the group through voting rights held via related entities. The group explained, "This adjustment is to better adapt to a modern governance system and to promote alignment between shareholder voting rights and economic interests," adding, "We plan to continue introducing an outside director system at the board level."
Ant Group, considered a global fintech company, is a subsidiary of Alibaba Group founded by Jack Ma and is well known as the operator of Alipay, a local Chinese electronic payment platform. Since Jack Ma sharply criticized regulators in public in October 2020, saying "fintech regulations are overly conservative" and "Chinese banks operate like pawnshops," Alibaba Group has been under intense regulatory scrutiny. Alibaba Group was also fined a record 18 billion yuan (about 3.3 trillion won) for antitrust issues.
Local media predict that the voting rights adjustment will further delay Ant Group's IPO. Ant Group originally planned to raise more than $35 billion (about 44 trillion won) through a simultaneous listing in Shanghai and Hong Kong in 2020, but the IPO was completely withdrawn after Jack Ma's critical remarks triggered regulatory backlash. Caixin stated, "Market participants see this adjustment as pushing Ant Group's IPO further away this year," adding, "According to relevant regulations, if the actual controller of a company changes, there is a three-year waiting period before listing on China's mainland A-shares." Ant Group also stated, "We will focus on business optimization and have no plans for an IPO."
However, some speculate that considering the Chinese government's strong commitment to private-led economic growth and boosting domestic demand, the IPO process might gain momentum. Especially, with Jack Ma, a 'thorn in the side,' losing control, the government may adopt a more favorable attitude going forward. A source said, "The government is firmly committed to growing the private sector," adding, "The sudden arrest of the Hangzhou Party Secretary in 2021 was also seen as a preemptive measure to remove obstacles before the IPO, and this loss of control may be interpreted in the same context within China."
In fact, in August 2021, Zhou Jiangyong, the Party Secretary of Hangzhou, China, was abruptly removed from office due to disciplinary violations. Hangzhou is the headquarters of Alibaba, and Jack Ma was known to be closely connected to the region, even receiving the honorary certificate of 'Meritorious Hangzhou Citizen.' At the time, there was speculation that Zhou Jiangyong was removed because he supported Jack Ma.
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