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Ant Group’s new structure leads to IPO plans

Ant Group's restructuring receives approval, diminishing Jack Ma's control and signalling a move towards an anticipated IPO. 

On Saturday, the People's Bank of China made a pivotal announcement regarding Ant Group, the affiliate of Group Holding. The central bank's statement, which identified Ant Group's Alipay as having no controller, marks a crucial step in the company's restructuring. This change is essential for relaunching the much-anticipated initial public offering (IPO) of Ant Group.

Major shift in voting rights

This restructuring has significantly altered the power dynamics within Ant Group, particularly affecting the role of its founder, Jack Ma. Previously, Ma held a commanding 53.46% of the voting rights. This figure has now been reduced to a mere 6.21%. This reduction is viewed as a strategic move, laying the groundwork for Ant Group to reinitiate its IPO plans, which were previously derailed in 2020 following a controversial speech by Ma.

Ma's voting rights have been redistributed to two main entities. Hangzhou Junhan Equity Investment, a company partly owned by Ma and four others, now possesses 31.04% of the voting rights. Additionally, Hangzhou Junao Equity, owned by another group of five individuals, holds 22.42% of the voting rights. This restructuring ensures that the voting shares of these entities align with their respective ownership stakes.

Ant Group's path to IPO

Experts in the industry view this development as a sign of the Chinese government's eased restrictions on major technology platforms. Observers like Dai Ming, a fund manager at Huichen Asset Management, and Wang Pengbo, a senior financial analyst at BoTong Analysys, have expressed optimism. They regard this move as a positive step for Ant Group's long-term development and a potential revival of its IPO plans.

Ant Group, an essential player in the fintech sector, has taken several restructuring steps since 2021. These include appointing a fifth independent director to its nine-member board and distancing itself from Alibaba by having key executives exit the Alibaba Partnership. This group of exiting executives includes Ant's chairman and CEO, Eric Jing Xiandong, and former CEO, Simon Hu Xiaoming.

Upcoming regulatory changes

Ant Group is a key player in the mobile payments industry, facing imminent regulatory changes. The State Council has released new rules for non-banking payment institutions, introducing more stringent licensing rules set to take effect in May.

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Nurin Sofia
Nurin Sofia
Nurin Sofia is a news editor at Tech Edition. Her interest is in technology and startups, occasionally crunching news for gaming. Sofia enjoys playing video games, going on bike rides, and gardening when she isn't behind a keyboard.

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