Ant Group's billionaire founder, Jack Ma, is to relinquish control of the Chinese fintech giant following a regulatory crackdown.
Ant Group said that after the change, no one will have overall control.
Mr Ma, a former firebrand, has rarely been seen in public since criticizing China's financial sector in 2020.
Following that criticism, Ant Group's planned stock market flotation was abruptly put on hold.
Ant Group runs Alipay, the main online payment system in China, which has taken over cash, checks and credit cards.
Mr Ma, a former English teacher who founded e-commerce giant Alibaba, directly and indirectly controls more than 50% of Ant Group.
However, according to a statement from Ant Group, it will only control a little over 6% following the change in governance structure.
Ant's £26bn stock market flotation in November 2020, which would have been the world's largest, was canceled at the last minute.
At the eleventh hour the Chinese authorities cited "major issues" on regulating the firm.
Some analysts see this as an attempt by the Chinese government to bring down a company that has become too powerful and a leader who has become too outspoken.
The regulatory intervention came after Mr Ma told a financial conference that traditional banks had a "pawn-shop mentality".
He also appreciated the merits of the digital banking system and emphasized that future lending decisions should be based on data and not collateral.
• Why did Jack Ma of Alibaba disappear for three months?
Following the collapse of a stock market flotation that was set to make Mr Ma the richest man in China, he disappeared for three months, leading to speculation about his whereabouts.
As per reports, he eventually resurfaced but has been avoiding the limelight since then.
the ant moves
Mr. Ma controls Ant through his own stake and by working closely with other shareholders.
But Ant said the shareholders had agreed not to act together when exercising voting rights, and would only vote independently.
There will also be a change in the shareholding structure.
However, Ant said that the economic interests of the shareholders would not change.
"Jack Ma's departure from Ant Financial, the company he founded, reflects the Chinese leadership's determination to reduce the influence of large private investors," said Andrew Collier, managing director at Orient Capital Research.
"This trend will continue to erode the most productive parts of the Chinese economy."
Ant Group is nearing the completion of a two-year restructuring that has been driven by regulators, and Chinese authorities are set to impose fines of more than $1bn on the firm, according to Reuters news agency.
The expected fine is part of a wider crackdown on China's technology giants over the past two years that has stripped hundreds of billions of dollars off their values and slashed revenue and profits.
However, officials have recently softened their tone amid efforts to shore up the Chinese economy, which has been hit hard by the COVID-19 pandemic.
Source link bbc news
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