Chinese billionaire Jack Ma is on the brink of relinquishing control of payment company Ant Group and succumbs to years of intense pressure from Beijing.
Ma’s decision to step back comes after a concerted effort by Xi Jinping’s government to curb his power. Mr Ma, 57, founded online retailer Alibaba and payment giant Ant, who rose to prominence as one of China’s most successful entrepreneurs with an estimated net worth of $24 billion (£19.8 billion).
In recent years, he became one of the most prominent figures in a Beijing crackdown the country’s technology sector.
Ant Group was forced to pull out of a $200 billion IPO in Hong Kong and Shanghai in November 2020 under the control of Chinese authorities.
A month earlier, Mr Ma had criticized the country’s financial regulations, attacking “outdated regulations,” a “pawnshop mentality” and warning that “economic growth and innovation are under threat” by Beijing authorities.
The flamboyant billionaire, who was known for performing at corporate parties dressed as Michael Jackson, not seen in public for three months after the failed float, but only reappeared during a low-key ceremony honoring the Chinese teachers.
Mr Ma has since kept a low profile during Ant’s negotiations with state authorities over a “rectification” of the payment company’s operations.
Ant, whose western investors include Warburg Pincus, General Atlantic and Silver Lake, has been forced into a drastic restructuring by state-owned banks, selling stakes in the company’s divisions to Chinese government funds.
The Wall Street Journal first reported that Ma would relinquish control of Ant. Shares of Alibaba, which has a large stake in Ant, fell 6 percent on Friday.
Ant had revived plans for his blockbuster listing, but Mr Ma’s decision to transfer control of the company is expected to further delay his public debut. Chinese listing rules require a waiting period of at least three years between a company changing its controlling shareholder and its listing on public markets, the Financial Times reported. In Hong Kong, the delay is a one-year wait.
In recent weeks, Mr. Ma has been spotted touring Europe, visiting a restaurant in Austria, a university in the Netherlands and docking his yacht off the Spanish island of Mallorca, Bloomberg reported.
Ali Baba, China’s answer to Amazonwas founded in 1999 by Mr. Ma. The financial activities were spun off in 2011, which grew into Ant Group.
Ant is arguably China’s most successful financial technology company, with over a billion users of its all-in-one payment app. The app allows customers to send payments, pay bills and invest in their savings, although it is under pressure from Chinese authorities to split its products.
Chinese tech stocks have fallen amid a broader technical downturn and fears of overreach from Beijing. Shares in Alibaba are down about 20 percent this year, while shares in gaming giant Tencent are down 29 percent.
Beijing’s technical crackdown included limits on the amount of time children can spend gaming and demands that the taxi company Didi withdraw from its US listing.
Alibaba has been fined billions of pounds by Chinese authorities in a crackdown on alleged monopolistic practices.