Jack Ma to Relinquish Ant Group Control Amid China’s Tech Crackdown

Jack Ma, the 57-year-old former English teacher turned tech mogul, said on Thursday that he plans to renounce his control over Chinese fintech giant Ant Group.

While Ma doesn't hold an executive or board position at the company, which he spun out of e-commerce titan Alibaba in 2016, he does control a 50.52% ownership stake, meaning he likely holds tremendous sway over major decisions. Ma could relinquish control by transferring some of his voting power to other top Ant Group executives, according to The Wall Street Journal.

Ma, who has recently fallen out of favor with Chinese political leaders, has contemplated ceding control of Ant Group for years over concerns about the corporate governance risks that could stem from the fintech firm over-relying on a single dominant executive, according to The Journal.

Almost two years ago, Ma became a contentious figure in China after criticizing the communist country's financial system in a speech at Shanghai’s Bund Finance Summit In the speech, he accused Chinese financial regulators of being too risk averse and said the economic system operated with a "pawnshop” mentality. Shortly after the October 2020 remarks, Ma disappeared from the public eye for an entire year without explanation.

During the billionaire’s mysterious absence, Chinese regulators scuttled Ant Group's potentially record-breaking IPO on the Shanghai and Hong Kong stock exchanges just days before its planned November 2020 debut. However, the company has since been given the green light to restart its IPO process.

The timing of Ma's decision to abdicate control of Ant Group comes as Alibaba gears up to apply for a primary listing on the main board of the Hong Kong Stock Exchange. The online shopping behemoth is already traded on both the U.S. and Hong Kong stock exchanges, but the current Hong Kong listing is a secondary one. A primary listing in Hong Kong would give Alibaba access to the Stock Connect link with major exchanges in Shanghai and Shenzhen, inviting in a wider pool of investors from mainland China, per Bloomberg.

Several Ant Group executives also stepped down from governance posts at Alibaba this week. The departures create a further divide between the affiliated companies and may head off potential regulatory issues that could hamstring Alibaba and Ant’s efforts to be publicly listed in China.

Ma's decision to relinquish control over Ant follows a larger Chinese crackdown on the country's tech sector, which the government has deemed too powerful. Over the past 18 months, a slew of prominent Chinese tech executives and founders have stepped down from their leadership roles, including ByteDance’s CEO Yiming Zhang, Kuaishou CEO Su Hua, Pinduoduo founder Colin Huang and former Ant Group CEO Simon Hu.

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