On Saturday, the People's Bank of China made a pivotal announcement regarding Ant Group, the fintech affiliate of Alibaba 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.
