Ant Group along with Chinese regulators reportedly are working out a way forward for the company and exploring ways for Jack Ma to exit.
What Happened: Jack Ma, founder of Ant Group, reportedly may divest his stake and give up his control to begin easing China’s scrutiny of the company, Reuters reported, citing sources close to the company.
Between January and March, the People’s Bank of China (PBOC), the China Banking and Insurance Regulatory Commission (CBIRC) and financial regulators held talks with Ma and Ant Group separately and discussed the possibility of Ma’s exit from the company.
Reuters said the decision about Ma’s exit was being discussed in meetings with officials. But an Ant Group spokesperson issued a statement to the outlet, saying Ma’s exit “has never been the subject of discussions with anyone.”
Sources told Reuters the company hoped Ma’s stake would be sold to Ant investors or Alibaba Group Holding Ltd (NYSE: BABA) without the involvement of any external entity.
This past week, following an ultimatum from the People’s Bank of China, the country’s central bank, Ant said it would become a financial holding company that falls under the purview of the Chinese central bank.
The news of Ma’s exit came a week after Alibaba was hit with a record .8 billion fine.
Why It Matters: The outspoken Ma has long been the most visible figure of China’s economic rise and stands out in a culture where getting attention at high levels can draw unwanted scrutiny.
Last October, Ma criticized China’s banking sector as operating with a “pawnshop mentality.” The government scuttled the planned blockbuster Ant Group IPO shortly after Ma made the comments.
The Chinese government blocked Ant Group’s IPO last November. The Chinese fintech’s public listing of $37 billion was set to be the largest in history.
Last year, the People’s Bank of China instructed Ant Group to “rectify” how it does business.
Ant’s businesses include Alipay, China’s largest digital payments company, an open insurance marketplace, and the Ant Fortune asset management and retirement planning platform. It has also launched financial products such as Yu’ebao.
Photo courtesy: World Economic Forum via Wikimedia
See more from Benzinga
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.