Tech mogul Jack Ma will give up control of Ant Group after a coordinated crackdown by Chinese regulators.
China has a love-hate relationship with its tech companies. Beijing clearly wants its tech companies to succeed on the global scene but wants to maintain a tight reign on them at the same time. Jack Ma’s companies, and especially Ant Group, are Exhibit A.
Ant Group originated from Ma’s Alibaba and quickly grew into a fintech powerhouse. The company was slated for an IPO that was projected to top $300 billion before Beijing canceled it and brought the company under the regulatory authority of China’s central bank.
According to The Wall Street Journal, Ma now plans to relinquish control of the company as it reorganizes itself. Giving up control could help the company eventually move toward another IPO, although it would be at least another year or more, as Chinese regulations call for a one-year pause on IPO plans following an ownership change.
The news is not particularly surprising, given the scrutiny Ma has been under. In fact, following criticism of China’s regulatory system, Ma disappeared from the public’s view so suddenly that some were worried about his well-being. Even a sighting months later did little to quell concern about the tech mogul.
WSJ’s sources say Chinese regulators did not stipulate that Ma give up control of Ant Group but did approve of the decision. Ultimately, it seems Ma has been concerned for some time over the company being too tied to a single figure but had not made any moves sooner in an effort to not trigger the one-year IPO timeout.
As regulatory scrutiny has increased, however, it seems Ma finally decided the IPO delay was the lesser of two evils.