Explore Ant Group has options for founder Jack Ma to give up its stake in the fintech giant and cede control, as meetings with Chinese regulators indicated the move could help loosen Beijing’s oversight of its business.
Officials from the PBOC and the China Banking and Insurance Financial Regulatory Authority (CBIRC) held talks between January and March with Jack Ma and Ant Group separately, during which the possibility of the businessman’s exit from the company was discussed.
The group denied that the withdrawal of Jack’s investments was not under consideration, and a spokesperson for the group said in a statement: The withdrawal of Jack Ma’s investment in Ant Group was never the subject of discussions with anyone.
The group had hoped that Jack Ma’s multi-billion dollar stake could be sold to existing investors in the group or its e-commerce affiliate, Alibaba, without involving any outside entity.
During discussions with the regulators, Jack Ma was informed that he would not be permitted to sell his stake to any entity or individual close to him, and instead had to exit altogether.
Another option is to transfer his stake to a Chinese state investor, and any move would need Beijing’s approval.
On the company side, Jack Ma met the organizers more than once before the Chinese New Year, which was in early February.
Ant Group began working on Jack Ma’s potential exit options about two months ago, and the group told officials during a meeting sometime before mid-March: It was working on options.
The discussions come amid a group reorganization and a wider regulatory campaign on China’s tech sector, which began after Jack Ma’s public criticism of the regulators in a speech he gave in October of last year.
And Jack Ma’s exit could help clear the way for the group to revive plans for its public offering, which were halted after the billionaire’s speech.
The group was about to raise an estimated $ 37 billion in what would have been the largest IPO in the world.
Beijing has since launched a series of new investigations and regulations that curbed Jack Ma’s empire and engulfed the country’s tech sector.
Although Jack Ma has previously resigned from positions in the company, he maintains effective control over Ant Group and has a significant influence on Alibaba.
While it only owns 10 percent of the financial group’s shares, it exercises control over it through the related entities.
Yunbo controls two entities that own a combined 50.5 percent stake in the Ant Group, Yunbo can decide all matters relating to the group, and Jack Ma owns 34 percent of Yunbo’s shares.