HONG KONG/BEIJING  (TIP)- Billionaire Jack Ma plans to cede control of Ant Group, the Wall Street Journal (WSJ) reported on Thursday, July 28, after a regulatory crackdown that scuppered its US$37 billion (S$51 billion) initial public offering (IPO) in 2020 and led to a forced restructuring.

While Ma owns only a 10 per cent stake in Ant, an affiliate of Alibaba Group Holding, he exercises control over the company through related entities, according to Ant’s IPO prospectus filed with the exchanges in 2020.

Hangzhou Yunbo, an investment vehicle for Ma, has control over two other entities that own a combined 50.5 per cent stake of Ant, the prospectus showed.

The newspaper said, citing unnamed sources, that Ma could cede control by transferring some of his voting power to Ant officials including chief executive Eric Jing.

Ant has informed regulators of Ma’s intention as it prepares to restructure into a financial holding company, the report said, adding that regulators did not demand the change but have given their blessing. In April last year, Reuters reported that Ant was exploring options for Ma to divest his stake in Ant and give up control.

The discussions at the time came amid a revamp of Ant and a broader state clampdown on China‘s technology sector that was set in motion after Mr Ma’s public criticism of regulators in a speech in October 2020.

Ant’s IPO, which would have been the world’s largest, was derailed days after the speech and Ma’s sprawling empire has been under regulatory scrutiny and going through a restructuring since then.

Ant operates the world’s largest and China’s ubiquitous mobile payment app, Alipay, which has more than one billion users. Once outspoken, Ma has kept an extremely low public profile as regulators reined in the country’s tech giants after years of a laissez-faire approach that drove breakneck growth.

                Source: Reuters