Jack Ma Will No Longer Control his ANT, After Shareholding Restructuring

It is intriguing: China’s Jack Ma is going deeper into playing golf, leaving business behind. Yes, Chinese billionaire Jack Ma will no longer control Ant Group after the company’s shareholders agreed to restructure  shareholding, according to a statement released by the company on Saturday, and explained by CNN: “After the adjustment, Ma’s voting rights will fall to 6.2%, from 50.52% of voting rights at Ant via Hangzhou Yunbo and two other entities, according to its IPO prospectus filed with stock exchanges in 2020.”

 Hangzhou Junhan and Hangzhou Junao hold an aggregate of 53.46% of the shares of Ant Group. Hangzhou Yunbo Investment Consultancy Co., Ltd. (“Yunbo Investment”) is the general partner of both Hangzhou Junhan and Hangzhou Junao and is not entitled to any economic benefits from Ant Group.  Mr. Jack Ma, Mr. Eric Xiandong Jing, Mr. Simon Hu and Ms. Fang Jiang hold 34%, 22%, 22% and 22% of the equity interests in Yunbo Investment, respectively. Pursuant to the existing articles of association of Yunbo Investment and the Concert Party Agreement, Mr. Jack Ma effectively can exercise control over the voting results of general meetings of Yunbo Investment for matters relating to the exercise of its rights as a shareholder of Ant Group, and therefore indirectly controls the voting rights represented by the 53.46% of the shares of Ant Group held through Hangzhou Junhan and Hangzhou Junao (each of which is controlled by Yunbo Investment).  As a result, Mr. Jack Ma is deemed to be the control person of Ant Group prior to the Adjustment.

Ant added in the statement that the voting rights adjustment, a move to make the company’s shareholder structure “more transparent and diversified,” will not result in any change to the economic interests of any shareholders.

Ant said its 10 major shareholders, including Ma, had agreed to no longer act in concert when exercising their voting rights, and would only vote independently, and thus no shareholder would have “sole or joint control over Ant Group.”

The voting rights overhaul came after Chinese regulators pulled the plug on Ant’s $37 billion IPO in November 2020, and ordered the company to restructure its business.

As part of the company’s restructuring, Ant’s consumer finance unit applied for an expansion of its registered capital from $1.2 billion to $2.7 billion. The China Banking and Insurance Regulatory Commission recently approved the application, according to a government notice issued late last week.

After the fund-raising drive, Ant will control half of its key consumer finance unit, while an entity controlled by the Hangzhou city government will own a 10% stake. Hangzhou is where Alibaba and Ant have been headquartered since their inceptions.

Ant Group is a fintech affiliate of Alibaba, both of which were founded by Ma.