Washington, (Asian independent) Chinese billionaire Jack Ma is planning to give up total control of Ant Group amid pressure from the government regulators, media reports said on Thursday.
According to a report in Wall Street Journal, the move is aimed at part of the fintech giant’s effort to move away from affiliate Alibaba Group Holding that is under immense scrutiny from the government.
Since last year, Chinese regulatory authorities have been cracking down harder on domestic tech giants like Alibaba and Ant Group to end their dominance in the internet sector.
The authorities called off Ant Group’s $35 billion IPO two years ago, forcing the technology firm to reorganise as a financial holding company regulated by China’s central bank.
“As the overhaul progresses, Ant is taking the opportunity to reduce the company’s reliance on Ma, who founded Alibaba,” the report noted.
“Diminishing his ownership could put back a potential revival of Ant’s IPO for a year or more. Chinese securities regulations require a timeout on public listings for companies that have gone through a recent change in control,” it added.
According to the report, Ma could relinquish his control by transferring some of his voting power to other Ant officials including Chief Executive Eric Jing.
Ma has controlled Ant since he carved its precursor assets out of Alibaba more than a decade ago.
In December last year, Alibaba announced a major reshuffle at the top, as the country tightened its stand against domestic Big Tech companies over data and internet regulations.
Alibaba also unveiled major reorganisation plans to boost its strategy of domestic and international e-commerce.
Founded in 1999, Alibaba went through a major reshuffle when Ma passed the baton as CEO to Daniel Zhang in 2015 and further appointed him as Chairman in 2019.
China’s market regulator in November fined tech giants Alibaba, Baidu, Tencent and e-commerce platform JD.com Inc and Suning for violating the country’s anti-monopoly rules in 34 mergers and acquisitions (M&A) deals in which they failed to declare illegal implementation of operating concentration.
Rattled by the alleged data leak of nearly 1 billion residents, the Chinese authorities recently summoned executives and senior technicians from Alibaba Group, after the hacker claimed the data came from Alibaba server.
Alibaba executives were called by Shanghai police as the law enforcement agency suffered one of the biggest data breaches in history.
