In the world of e-commerce, billionaire Jack Ma is a renowned and controversial figure. The English teacher-turned-entrepreneur has been under the scanner of the Chinese government ever since he passed some remarks on Chinese banking regulators.
In 2019, he criticised the Chinese banking regulators for acting like ‘pawnshops.’ He disappeared from public view thereafter.
Now, it’s been reported that Ma will give up control of the Ant Group where he earlier had more than 50 per cent of voting rights.
What does that mean to the Ant Group and Ma?
It means Ma would no longer be the ‘control person’ at the company. His shares would fall close to 6 per cent with the new development. Ant Group handles China’s mobile payment app Alipay which has more than one billion users. According to the statement issued by the Ant Group, Ma and nine of its other major shareholders had agreed to no longer act in concert when exercising voting rights. Hence, a direct or indirect shareholder will no longer have sole or joint control over Ant Group. Although that could revive Ant’s IPO bid, Chinese laws may bring more delays. According to China’s domestic A-share market, companies have to wait three years after a change in control to list. In Shanghai, the waiting period is two years and in Hong Kong, it is one year.
The Communist Party of China had been tough on tech companies in the country since late 2020. It issued antitrust investigations and regulatory changes to crack down on companies. Ma’s two companies – Alibaba and the Ant Group – have suffered a lot.
The government accused tech giants like Alibaba and Tencent Holdings of mistreating users and forced the companies to open up their algorithms to each other. The biggest blow was when the Chinese officials forced Ant Group to shelve its $37 billion IPO, which was billed as the world’s biggest one, just 48 hours before the scheduled listing in 2020. Not just that, but the government also fined Alibaba $2.8 billion for abusing its dominance.
