Ant Group said its founder Jack Ma would relinquish control of the Chinese fintech giant to revive a $37 billion IPO that was canceled at the last minute in 2020, Reuters reported.
Ant Financial’s $37 billion IPO will be the world’s largest.
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– Large shareholders such as Hangzhou Junhan and Hangzhou Junao will independently exercise voting rights
– No shareholder has the right, either alone or with other shareholders, to control the outcome of the general meeting of Ant Group
– No shareholder has the right to nominate a majority of Ant Group’s board of directors
– The shareholding structure of Ant Group will be more transparent and diversified
– It will not affect the daily operation of ants
Relinquishing control could clear the way for the company to restart its IPO, analysts said, but the change could cause further delays due to listing regulations.
China’s domestic A-share market requires companies to wait three years after a change in control before going public. Wait for two years in Shanghai’s Nasdaq-style science and technology innovation board market, and wait for one year in Hong Kong.
Ma owns a 10 percent stake in Ant Financial, a subsidiary of e-commerce giant Alibaba Group Holding. According to Ant Financial’s IPO prospectus filed with the exchange in 2020, Jack Ma exercises control over the company through related entities.
Ma’s investment vehicle, Hangzhou Yunbo, controls two other entities that collectively own 50.5 percent of Ant, according to the prospectus.
Ant Financial said that Jack Ma and his other nine major shareholders have agreed to no longer act in concert when exercising voting rights, and will only vote independently. Ant Group stated that the economic interests of shareholders in Ant Group will not be changed due to the adjustment.
Ma previously held more than 50 percent of Ant Financial’s voting power, but the change means his share will drop to 6.2 percent, according to Reuters calculations.
Ant Financial also said it would add a fifth independent director to the board so that independent directors would constitute a majority of the company’s board. It currently has eight directors.
“Therefore, there will no longer be a situation where direct or indirect shareholders control Ant Group individually or jointly,” it said in the statement.
Ant Financial’s Hong Kong and Shanghai listings were blocked days after Ma publicly criticized regulators in a speech in October 2020. His sprawling empire has been under regulatory scrutiny and restructured since then.
Ant Financial operates Alipay, China’s ubiquitous mobile payment app, the world’s largest with more than 1 billion users.
Ant Financial said on Saturday that its management would no longer serve at Alibaba Partners, the body that can nominate a majority of the e-commerce giant’s board, confirming changes that began in the middle of last year.