Ant Group, one of China’s most influential financial tech companies, said on Saturday that billionaire entrepreneur Jack Ma plans to give up control of the company.

Mr. Ma retreated from the company he founded after the ruling Communist Party took an unprecedented crackdown on Big Tech. Beijing had made Mr Ma’s Ant Group and its sister company, the e-commerce giant Alibaba, the crown jewels of its online empire. An early target in a campaign to curb the power of the internet giants.

Chinese authorities forced Ant Group to pull off a blockbuster initial public offering in 2020 and later fined it a hefty $2.8 billion for abusing its dominance over Alibaba. Last year, Ant Group said it would undertake a major government-ordered overhaul of its business to address regulators’ concerns about unfair competition and the amount of data it collects on users.

Under Xi Jinping, China’s top leader, Beijing has in recent years sought to exert greater state control over the economy, including reining in the influence of tycoons who have amassed vast wealth but are unable to control their borders. seen to cross.

Mr. Ma was once hailed as a model of success in China, but he has faced growing trouble with the Chinese government, especially after he criticized the country’s banking regulators in late 2019. In recent years, he has largely disappeared from public view.

ant group said in an announcement on Saturday that Mr Ma would no longer be the “controlling person”, holding 34 per cent of the company’s shares. Instead, he will be one of the 10 major shareholders.

The announcement, which described the move as part of a “corporate governance optimization” plan, gave no details on when the changes would be finalized, and noted that they would affect the company’s day-to-day operations. Will not affect. Under the current governance structure of Ant Group, Mr. Ma does not have a management role.

Ant’s flagship Alipay app is a leading portal for more than 1 billion users in China who use it to pay for food, shop on credit and build up their savings. But its influence and size make it a point of concern for Beijing as authorities scrutinize the fintech industry for potential risks to the country’s wider financial system. Then, in 2020, shortly before Ant went public, regulators abruptly halted its initial public offering, estimated at the time at $34 billion, which would have been the largest IPO on record.

It was not immediately clear how Mr Ma’s retreat from Ant Group could affect any plans the fintech giant might have to relaunch its initial public offering. But it may get delayed due to listing norms. The Hong Kong Stock Exchange requires a one-year waiting period following a change of ownership; Other markets require two or three years.

Ant Group has restructured its companies in accordance with the demands of the Chinese authorities. Last month, regulators Approved A $1.5 billion capital increase plan for its consumer lending unit, allowing a branch of the Hangzhou government to become its second largest shareholder. The capital raise overcame a major regulatory hurdle, allowing it to issue consumer loans of up to an estimated 500 billion yuan, or $73 billion.

The approval was the latest indicator that the Chinese government is ready to loosen its tough stance on Internet companies in an effort to jumpstart economic activity in 2023.

After a long period of stringent “zero Covid” lockdowns and tighter fines and regulations on Ant Group and other tech giants, Li Qiang, the Communist Party’s new No. 2 official, urged cadres to “vigorously develop digital technology” at an economic meeting in December. urged. economyā€¯ and improving their global competitiveness.

Zixu Wang Contributed to research.

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