Jack Ma to cede control of Alibaba’s fintech business in shareholder revamp

Alibaba’s founder Jack Ma will cede control of its fintech affiliate, Ant Group, as part of changes the company says aim to improve its corporate governance and transparency. 

The “adjustment” to the shareholding structure will see changes to the voting rights of its major shareholders, including Ma, according to a statement released Saturday by Ant. 

The Chinese fintech company said Ma holds a controlling stake and voting rights via Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Investment Partnership. Hangzhou Yunbo Investment Consultancy is the general partner of both investment firms, which together hold 53.46% of Ant shares. 

Ma owns 34% equity interests in Hangzhou Yunbo, while other major shareholders Eric Xiandong Jing, Simon Hu, and Fang Jiang hold 22% shares each. All are linked via an agreement to “act in concert” with regards to their voting rights, with Ma the controlling vote, in matters concerning Ant.

This will no longer be the case following the changes, which will see Ma, Jing, Hu, and Fang relinquishing their arrangement to act in concert when exercising their voting rights. 

Hangzhou Yunbo Investment also will exit its partnership with Hangzhou Junhan, decoupling the links between Ant’s two investors, while another investment group Hangzhou Xingtao Enterprise Management Consultancy will fill the gap. Ma also has equity interests in Hangzhou Xintao. 

When completed, the restructure will mean no single shareholder–working alone or with another shareholder–have the power to control the outcome of general meetings, Ant said. 

It added that none of its 10 major shareholders will have the power to nominate the majority of its board and, hence, will not be able to have control over the company. 

Alibaba’s shares climbed 8.7% on Monday following news of the shareholder changes. 

Ant in November 2020 pulled back plans for an IPO in Shanghai and Hong Kong after regulators found the company did not fulfil requirements to do so. 

The latest restructure is part of various initiatives it rolled out since 2021, to “optimise” its corporate governance and establish “long-term sustainable development”, Ant said in its statement. These included bumping up the number of independent directors to four, accounting for half of incumbent members on the organisation’s board, An additional fifth independent director also will be appointed, which means independent directors will form the majority of its board, according to Ant. 

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