It was to be one of the biggest deals of all time, the culmination of a stellar entrepreneurial career. A good two years ago, Jack Ma wanted to take his financial group Ant Financial public and make billions more. But Ma fell out of favor with the Chinese government – and they canceled his mega-business without further ado. Now the internet billionaire is giving up control of the group, as said at the weekend.
Through a complicated network of holdings, Ma only held ten percent of the shares in Ant, but held more than half of the voting rights. Now his voting rights are to be reduced to around six percent, meaning that no shareholder would have sole control over the company in the future. With that, Ma, who has largely disappeared from public view, continues to withdraw from the online empire he founded.
Too much power, too much criticism
The 58-year-old former English teacher from Hangzhou in Zhejiang province was one of the most colorful figures during the Chinese Internet economy boom in the 2000s. With Alibaba, he built up the leading online retailer in the second largest economy in the world. Although he relinquished leadership of Alibaba in 2019, he remained the face of the group and expanded into other business areas. The payment service provider Alipay, which belongs to Ant and has around one billion users, is increasingly threatening state control over the financial sector. In addition, the self-confident founder repeatedly surprised with outspoken criticism of the state leadership.
In October 2020, a scandal finally broke out when Ma accused the assembled party elite at a banking conference in Shanghai of being too risk-averse in their market reforms. Apparently, he went too far, party leader Xi Jinping himself is said to have banned Ant’s EUR 30 billion IPO in Hong Kong at the last minute. Among other things, the authorities took tough antitrust action against Mas companies: Alibaba had to pay a fine of more than 2.5 billion euros, Ant had to disconnect Alipay from services such as asset management and consumer credit.
Ma himself disappeared completely for months and since then has only appeared occasionally and with harmless messages in public. He has reportedly been living mostly in Japan for the past few months, but has also been spotted in Europe and most recently in Thailand. The problems of his companies have affected his fortune according to the figures of the fortune-Magazine halved to a good 20 billion euros.
However, the authorities had recently indicated a change from their tough course by approving Ant for a multi-billion dollar capital increase. However, hopes that Ant could make another attempt at an IPO anytime soon are premature. Following the change in Ant’s control structure, the company is barred from listing in Hong Kong for at least a year and up to three years in the mainland.