Entrepreneur Jack Ma plans to give up control of his company, Ant Group, in a bid to appease Chinese regulators.
The development is part of Ant Group's efforts to distance itself from Alibaba, which has found itself one of the main targets of the country's crackdown on big tech firms.
Ant Group has been forced into a 'rectification' process, which has been overseen by the Chinese central bank. This has included selling stakes in top-performing business units and reducing some of its overseas operations, as reported by Bloomberg.
Ma does not hold any executive role at Ant Group, nor does he sit on its board, however, he has control of 50.52% of its shares, which gives him significant voting power over the company. It's thought that Ma could hand over some of this power - not necessarily his shares - to other Ant officials, such as its chief executive Eric Jing.
It's also thought that Ma has been considering giving up control for a number of years but pressure from regulators has brought that decision forward. However, relinquishing his power over Ant Group could potentially delay the company's IPO even further, as Chinese firms need to wait three years to list on the mainland if there are changes to controlling shareholders.
Ant Group, Alibaba, and the Chinese government
Ant Group and Ma have found themselves at the centre of a crackdown on Bejing's corporate giants. The government has sought to rein in the influence of certain companies, particularly in the tech industry, and implement new legislation to impede monopolistic behaviour.
The clampdown began at the end of 2020, with the government suspending Ant Group's plans to go public, which was officially explained as protection of investors. However, some argue this decision was spurred instead by Ma's criticism of the crackdown, which he said was too conservative in a now infamous speech made on 24th October, 2020.
Since then, an anti-monopoly law has been brought in to prevent tech firms from using certain consumer-facing algorithms. Alibaba has also been hit with a $2.8 billion anti-trust fine and Ma has spent most of this period in a sort of exile. He is currently on an extended stay in Europe.
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