Jack Ma Plans to Give Up Control of Ant, Dow Jones Says

Move could push back Ant IPO by a year or more: Dow Jones

Ant has been recasting itself since IPO was derailed in 2020

By Lulu Yilun Chen

July 28, 2022

Billionaire Jack Ma plans to relinquish control of Ant Group Co., Dow Jones reported, citing people familiar with the matter, part of the fintech giant’s effort to appease regulators following a lengthy crackdown.

With Ma giving up control, a revival of Ant’s initial public offering could be put back another year or more, Dow Jones reported, citing Chinese securities regulations that require a timeout on public listings for companies that have gone through a change in control.

Ma, who doesn’t hold any titles at Ant, currently controls 50.52% of voting rights in the company. He could transfer some of his voting power to other Ant officials including Chief Executive Eric Jing, Dow Jones cited the people as saying.

Ant told regulators of Ma’s intention to cede control, the people said, adding that regulators didn’t demand the change but have given their blessing.

“With Jack stepping down, a significant key man risk will be removed from the neck of Ant,” said Justin Tang, the head of Asian research at United First Partners. “While there will be a waiting period for Ant with this change, it will make little difference as the weak markets will mean that Ant is in no rush to be listed.”

The American depository receipts of Alibaba Group Holding Ltd., which owns a third of Ant, erased initial gains to trade 0.3% lower in pre-market trading as of 6:44 pm in Singapore. Its Hong Kong shares fell 1.8% on Thursday to close at their lowest since June 7.

The crushing of Ant’s $35 billion IPO in November 2020 sent shock waves across the financial world, burning investment firms from Carlyle Group Inc. to Temasek Holdings Pte that had expected a windfall. It also marked the beginning of a broader crackdown that ensnared some of China’s fastest-growing companies.

The Hangzhou-based firm has since been recasting itself to meet the demands of China’s watchdogs, who have pledged to curb the “reckless” push of technology firms into finance.

The Communist Party’s evolving stance toward the private sector has become one of the most closely watched developments in global markets in recent years, with some observers going as far as to call China’s sprawling internet sector uninvestable.

Ma, who controls Ant, has mostly disappeared from public view since giving a speech that criticized regulators on the eve of the scuttled Ant IPO. Many of his peers have relinquished their formal corporate roles and increased donations to charity to align with Xi’s vision of achieving “common prosperity.”