Chinese billionaire Jack Ma will no longer control Ant Group, the fintech firm he founded, after the company reorganized its shareholding structure in order to “align the voting interests of shareholders with their economic interests,” according to a company statement. Ma is also the founder of Ant Group’s sister company, retail giant Alibaba, although he stepped down from his leadership role at that company in 2019.
While Ma holds no executive role at Ant and doesn’t sit on its Board, he had held more than 50% of voting rights before the restructure. Now with the shareholder adjustments, CNN estimates that Ma’s voting rights have been reduced to 6.2%. Ant Group also said that Ma and its nine other major shareholders had agreed to no longer act in concert when exercising their voting rights and will only vote independently going forward.
“No shareholder will, alone or jointly with another shareholder, have the power to control the outcome of Ant Group’s general meetings,” reads a statement from the company. “No shareholder will have the power to nominate the majority of Ant Group’s Board of Directors. Therefore no shareholder, alone or jointly with other parties, will have control over Ant Group.
“As a result of the adjustment, the shareholding structure of Ant Group will be more transparent and diversified, which will facilitate the steady development of the company,” the statement continued. “The adjustment will not affect the day-to-day operations of Ant Group. We will continue to serve the real economy by leveraging digital technology, implementing our sustainable development strategy, optimizing our corporate governance, investing in cutting-edge technologies and creating greater value for society.”
The power shift comes after a series of setbacks for the financial services firm, part of the Chinese government’s crackdown on the tech industry — of which Ma has been a central focus. In November 2020, Chinese regulators pulled the plug on Ant Group’s planned IPO and ordered the company to restructure its business. Since then, Ant Group has taken a number of steps to comply with government demands, including increasing the number of independent directors on its Board and applying for an expansion of its registered capital from 8 billion yuan (approximately $1.2 billion) to 18.5 billion yuan (approximately $2.7 billion), which was approved earlier this month.
The Hang Seng Tech Index surged 3.2% on Jan. 9 — led by gains at Alibaba — following the news of Ant’s restructuring and comments from a top central bank official indicating that the crackdown on China’s tech sector was coming to an end.