After the crackdown in China, Jack Ma will give up control of Ant Group
The Chinese fintech company Ant Group said on Saturday that Jack Ma will no longer be in charge of the business. The most recent announcement states that the corporation will remove Ma’s vote control by granting independent voting rights to 10 people, including the founder, management, and employees.
This occurs in the midst of a regulatory investigation of the company that was started after its enormous stock market debut was postponed two years ago, according to Reuters. Ant Group, a division of the Alibaba Group, was 10% owned by billionaire Jack Ma. He allegedly utilised related companies to influence the company, according to the research.
The story claims that two further businesses that together owned a 50.5% stake in Ant were under the management of Ma’s investment vehicle Hangzhou Yunbo. According to the most recent information, Ma and nine of Ant Group’s other significant owners have decided to cease acting jointly and solely vote independently. The revisions, it continued, will not alter the economic interests of Ant’s stockholders.
Ma’s holding decreased to 6.2% following the most recent Ant Group revisions, according to Reuters. In order to ensure that independent directors make up the majority of the board of the company, Ant also announced that it would appoint a fifth independent director to its board. According to the company’s announcement, “there will no longer be a circumstance where a direct or indirect stakeholder will have sole or joint control over Ant Group.”
Ant’s $37 billion IPO, which would have been the biggest ever, was abruptly postponed until 2020. It thus required a rearrangement of the team. In October 2020, Jack Ma lambasted Chinese regulators in public. His corporate empire has since come under regulatory scrutiny.
According to a Bloomberg report, Ant Group has concentrated on reorganising its business operations to placate regulators. According to the report, the company increased the capital base for its consumer loan subsidiary and took steps to erect firewalls in an ecosystem that had previously let it to route traffic from the Alipay payment network.
Strikes against China’s tech giants
The anticipated fine is a component of Beijing’s extensive and unprecedented crackdown on the nation’s technological giants over the previous two years, which has reduced their value by hundreds of billions of dollars and reduced their sales and earnings. However, in recent months, Chinese authorities have toned down their digital crackdown in a bid to support a $17 trillion economy that has been severely harmed by the COVID-19 outbreak.
According to Duncan Clark, chairman of investment consulting firm BDA China, “With the Chinese economy in such a tumultuous situation, the government is eager to express its commitment to growth, and the tech, private sectors are important to that as we know.” After a long period of uncertainty, “At least Ant investors can (now) have some schedule for an exit,” said Mr. Clark, who is also the author of a book on Alibaba and Mr. Ma.
Ma criticised regulators publicly in 2020
Days after Mr. Ma publicly criticised regulators in a speech in October 2020, Ant’s market IPO in Shanghai and Hong Kong was shelved. Since then, regulatory oversight and a restructure have been applied to his vast company.
Mr. Ma was once outspoken, but since the regulatory crackdown that restrained the nation’s digital behemoths and did away with a laissez-faire philosophy that fueled breakneck growth, he has mainly remained out of the public eye.
According to Andrew Collier, managing director of Orient Capital Research, “Jack Ma’s resignation from Ant Financial, a firm he founded, illustrates the intention of the Chinese authorities to diminish the power of significant private investors.”
The most productive sectors of the Chinese economy will continue to deteriorate as a result of this tendency. According to Reuters last year, Ant and Alibaba have started detaching their businesses from one another and independently seeking new business as Chinese officials frown on monopolies and unfair competition.
The move that began in the middle of last year was confirmed by Ant’s announcement on Saturday that its management will no longer participate in the Alibaba Partnership, a body that can nominate the majority of the board members of the e-commerce behemoth.
Read Also:
- Unveiling the Mukesh Ambani’s Success Story
- Top FMCG Companies in India: Leading Brands Driving Consumer Markets
- iGo Wise Mobility Pvt. Ltd.
- Rakhi 2024: Top gifts for brothers under 1500 to brighten their day
- Gurmeet Likhari and its group Brahma Tank
- Top 10 Least Visited Countries in the World Till August 2024
