Jack Ma to lose control of Ant Group

Chinese entrepreneur Jack Ma will lose control of Ant Group, the world’s largest fintech company and a “subsidiary” of Alibaba founded by him, notice of “optimization of corporate governance” published on site companies.

Jack Ma and three other investors currently own 53.46% of Ant Group through Hangzhou Yunbo Investment, according to released data. After the reorganization, its share will be only 6.2% calculated Reuters. As the agency points out, Ma and its nine other major shareholders have agreed to no longer act in concert in exercising voting rights and will only vote independently. The company also said it will add a fifth independent director to its board of directors to ensure that independent directors make up the majority.

In October 2020, Jack Ma publicly stated that China’s financial regulators are stifling innovation, which in turn is slowing economic growth. In November 2020, Ant Group was preparing for an IPO on the Shanghai and Hong Kong stock exchanges, but the placement was thwarted a couple of days before the start of trading after regulators called Jack Ma for questioning. Later, the People’s Bank of China also ordered a massive restructuring of Ant Group.

According to Reuters, Ma’s loss of control over Ant Group marks the end of a two-year restructuring of the fintech giant, which was overseen by Chinese regulators, who are going to impose a fine of more than $1 billion on the company. The main asset of Ant Group is one of the largest payment systems.

In April 2021, China’s antitrust regulators slapped Alibaba with a record $2.78 billion fine for the country. The company was accused of abusing its position in the market and imposing its services on users “without the right to choose.”

In fiscal 2022 (April 1, 2021 to March 31, 2022), Alibaba’s total revenue grew by 19% year-on-year to 853.1 billion yuan (about $127.3 billion). Profit for the specified period decreased by 59% to 62 billion yuan (about $9.2 billion).