Ant Group’s IPO likely to be further delayed as Jack Ma plans to cede control
Jack Ma is considering ceding control of Ant Group, a move that would further delay the Chinese fintech giant’s plans to launch an initial public offering.
Ma’s retirement comes after Beijing derailed Ant’s blockbuster IPO nearly two years ago and demanded the group restructure its operations.
The moment also led to the billionaire entrepreneur retreating from public view, as Beijing tried to rein in the influence of its corporate titans and launched a broader crackdown on technology.
The “rectification” process overseen by China’s central bank has forced Ant to reorganize its business by selling stakes in top-performing units such as lending and credit rating to other groups, including state-owned companies, as well as to reduce some of its operations. such as a proprietary money market fund that was once the largest in the world.
Ma had been considering relinquishing control for several years, and Ant addressed the change in conversations with regulators as early as last year, according to people briefed on the matter.
But giving up control of Ma would force Ant to delay restarting an IPO for at least a year and potentially up to three years, depending on where the group ultimately chooses to sell stock. Companies must wait up to three years to register on the mainland if changes are made to their majority shareholder, while Hong Kong requires a one-year hiatus.
The Wall Street Journal, which first reported the plan, said Ant notified regulators of the pending change as part of its application to convert to a financial holding company, which was submitted earlier this year.
The People’s Bank of China has yet to approve the request and reporting last month that Ant was close to completing its ‘rectification’ was met with furious denials from unnamed officials speaking to the media of Chinese state.
The suspension of Ant’s IPO in November 2020 sparked a broad regulatory crackdown on Chinese tech groups, including billions in fines for Ant’s sister company Alibaba for monopolistic practices and demands that the carpooling group Didi renounces its listing in the United States.
It also forced Ma, China’s most prominent and dynamic entrepreneur, to retreat into the shadows as Beijing took aim at his empire and channels of influence. His popular business school in Alibaba’s hometown of Hangzhou was barred from enrolling new students and the city’s Communist Party secretary was removed from his post for corruption, a scandal that also involved Ant.
Ma’s decision to relinquish control could come through changes to a voting agreement reached ahead of Ant’s planned dual bid in Shanghai and Hong Kong. At the time, Ma sold the shares of the group’s majority shareholder, Hangzhou Yunbo, to top lieutenants, including then-general manager Simon Hu, chairman Eric Jing and co-founder Jiang Fang. ‘Alibaba and director of Ant.
The changes left Ma with a 34% stake in Yunbo and each of his lieutenants with a 22% share, but the parties also reached an agreement that gave Ma voting control over Yunbo.
Ant did not immediately respond to a request for comment.