Technology news

Alongside a Communist Party clampdown on the country’s software industry which attacked the visionary billionaire, Jack Ma will relinquish control of Chinese financial technology giant Ant Group, the firm told.

Ma who is one of the most well-known entrepreneurs in china once embodied a generation of Chinese technology tycoons with his inspirational personal story as well as a knack for public flamboyance.

However, the former English teacher has withdrawn from the view of the public seeing as Beijing sabotaged Ant’s scheduled IPO in Hong Kong in response to his scornful remarks regarding government regulators in 2020.

His company said in a statement on Saturday it was adjusting its ownership structure so that “no shareholder, alone or jointly with other parties, will have control over Ant Group”.

Source: theguardian.com

Establishing the previous complex structure of the firm, the official statement had shown Ma implicitly handled 53.46 percent of Ant’s shares as well as regarded the firm’s “control person”.

As stated in the statement, he will receive only 6.2 percent of the political rights after the adjustment.

“The adjustment is being implemented to further enhance the stability of our corporate structure and sustainability of our long-term development,” the Ant statement said.

Ten individuals – including the founder, management, and staff – would “exercise their voting rights independently”, it said.

Source: theguardian.com

The modification would have no impact on the financial expectations of any stockholders.

Ant’s anticipated IPO was expected to be a world-record ranking at the moment, as well as its destructive withdrawal occurred as Ma’s other corporate interests were being scrutinized by the government.

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Beijing also struck a record 2.75 billion USD fine on Alibaba which is the internet titan co-founded by Jack Ma which functions famous Chinese e-commerce platforms Taobao and Tmall.

Authorities announced last month that Ant had received approval to raise 10.5 billion yuan which is approximately $1.5 billion for its consumer finance arm, indicating that the formal grip may be weakening.

As per a notice given on December 30, a China Banking and Insurance Regulatory Commission bureau in the southwestern city of Chongqing will enable the company to increase its registered capital from 8 billion yuan to 18.5 billion yuan.

The permission sent Alibaba shares up nearly 9 percent in Hong Kong trading, whereas other tech companies were also ramped up in hopes that the sector backlash would be loosened.

In November, Alibaba reported a loss of 20.6 billion yuan for the 3rd quarter. For the very first time, the firm did not provide full sales numbers for its Singles Day purchasing extravaganza in 2022.

The e-commerce festival, which had once seen Ma with important Chinese as well as Western celebrities, has grown more subdued in recent times.

Ma has kept a low profile as of Ant’s failed IPO, with only a few outings at fundraising events as well as trips abroad. Bloomberg stated on Saturday that he had been in Thailand this week.

The government-ordered makeover of the financial technology company is progressing after Chinese regulators accepted a plan by billionaire Jack Ma’s Ant Group Co. to fund 10.5 billion yuan ($1.5 billion) for its consumer unit.

A bid by billionaire Jack Ma‘s Ant Group to raise 10.5 billion yuan for its consumer division was authorized by Chinese regulators, signifying headway in the government-ordered reorganization of the financial tech firm.

According to a notice published on December 30, the Chongqing branch of the China Banking and Insurance Regulatory Commission approved the company’s intention to increase its capital to 18.5 billion yuan.

An entity held by the city of Hangzhou would hold 10% of the company’s shares after the deal, making it the second-largest shareholder behind Ant, which committed 5.25 billion yuan as part of the plan.

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The deal removes a significant barrier for Ant as it works to satisfy regulatory requirements in the wake of a crackdown on its operations following the failure of its big initial public offering in 2020. Ant is still trying to receive a financial holding license that will oversee it more like a bank. Chinese officials have curbed shadow banking over the past few years to lower economic risk.

The approval is another indication that Beijing is easing its position on its enormous internet sector, which has historically been a major driver of growth as the second-largest economy in the world struggles.

Authorities granted approval for the largest group of brand-new major game releases in months last week, enabling Tencent Holdings to restock a pipeline that had been depleted by the crackdown.

After the Ant news broke and the Hang Seng Tech Index continued its uptrend to gain 3.3%, shares of Ma’s Alibaba increased by as high as 7.7%. While Baidu Inc. rose by 6%, Tencent increased by over 4%. According to Leon Qi of Daiwa Capital Markets Hong Kong Ltd., “we view it as a signal on Ant’s regulatory rectification wrap-up.”

Once the funding is finished, he predicted that the consumer division will be able to manage 1.1 trillion yuan in loans. Jiangsu Yuyue Medical Equipment & Supply Co. and Sunny Optical Technology Group Co. are two additional recent investors.

The consumer finance division combines Huabei and Jiebei, Ant’s two most successful online lending businesses. A previous attempt to increase capital to 30 billion yuan has been toned back and is now included in the present plan.

One of China’s bad-debt managers, Cinda Asset Management, canceled a deal to invest 6 billion yuan for a 20% interest in the market leader in consumer financing last year without providing a rationale.

Jack Ma has kept a quiet profile since Ant’s IPO was put on hold. Alibaba reaffirmed that Ma “intends to reduce and thereafter limit his direct and indirect economic interest in Ant Group over time” to a level that does not exceed 8.8%” in a filing in July.