The multi-billionaire has largely withdrawn from the public eye.
(Photo: AP)
Berlin Jack Ma, founder of online retailer Alibaba and financial services provider Ant (“Alipay”), relinquishes control of Ant Group. The company announced this on Saturday.
With this step, the 58-year-old is withdrawing further from his powerful empire. Alipay, along with Tencent (“Wechat”), dominates the multi-billion dollar digital payments market in China.
So far, Ma has not held a management position in the traditional sense at Ant. He had already resigned as Chairman of the company’s Board of Directors in 2019. So far, however, Ma has held de facto control of Ant via a comparatively complex company construct.
Now Ma gives up part of his shares in the company construct controlling Ant, which in turn is being reorganized, as well as other privileges, and as a result loses his dominant role in the group.
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“No shareholder, alone or jointly with another shareholder, is authorized to control the outcome of the general meetings of the Ant Group,” says Ant’s announcement on the future list. No shareholder will have the power to nominate the majority of Ant Group’s board of directors. “Therefore, no shareholder alone or jointly with other parties will have control over the Ant Group,” the company clarified.
Ma as a critic of Chinese leadership’s decisions
Up until a few years ago, Ma was one of the few Chinese business personalities who dared to publicly criticize measures taken by the Chinese government or the regulators in Beijing. That was his undoing just before the planned IPO of Ant at the end of 2020. The Chinese government surprisingly stopped the giant IPO. Shortly before, Ma had called for less regulation for financial service providers so as not to stifle innovation. Apparently, his comments were not well received by the Chinese leadership.
What the latest move means for Alipay’s potential IPO is unclear. In recent years, Ant had introduced several measures to reorganize the group, which should satisfy the regulators.
As the Bloomberg news agency reports, the latest changes could result in a further delay of the plans – at least on stock exchanges in mainland China. Accordingly, companies cannot be listed domestically if they have had a change of control in the past two to three years. For the Hong Kong stock exchange, this waiting period is one year, according to Bloomberg.
Even when Ma resigned as chairman of the board of directors in 2019 – officially to devote himself to charity projects – it was said that Ma, with his pithy speeches and assertive manner, was too prominent among the Communist Party (CP) leadership. Under head of state and party leader Xi Jinping, the CP has exerted increasing influence on all areas in recent years – not just on society, but also on the economy.
Other founders of large tech companies had also withdrawn further and further in recent years. Zhang Yiming, head of the Chinese short video company Bytedance (“Tiktok”, “Douyin”), announced his resignation in 2021.
After the cancellation of the IPO, Ma had largely withdrawn from the public eye and, according to media reports, even left China. Accordingly, he stayed mainly in Japan.
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Ma launched Alipay, the payment app that forms the core of Ant’s business model, in 2004. At that time, it was only intended to process transactions for the online retailer Alibaba, which Ma founded in 1999.
Jack Ma is an extraordinary entrepreneur in many ways. He began his career as an English teacher after, by his own admission, having repeatedly achieved very low results in the mathematics section of the Gaokao, the Chinese equivalent of the German Abitur. Among other things, he became known throughout China with spectacular performances on stage.
When he stepped down as CEO of Alibaba in 2019, he sang “You raise me up” at his big farewell party in a studded leather jacket and sunglasses in front of tens of thousands of Alibaba employees. It wasn’t Ma’s first appearance. At previous company events, he had already sung “The lion sleeps tonight” in a long-haired wig and dark lipstick.
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