Ant Group, the financial technology giant, is reportedly considering options for its founder, Jack Ma, to divest his stake in the company and give up control. This move comes as Ant Group faces increased scrutiny from Chinese regulators. Despite only owning a 10% stake in the company, Ma wields control through related entities. Recent meetings between Ant Group, Chinese regulators, and Ma have centered around discussions regarding his potential exit from the company.

Sources familiar with the regulators’ thinking reveal that talks between Ant Group and Chinese authorities have focused on the possibility of Ma completely divesting from the company. One suggestion is that Ma could sell his stake to existing investors in Ant Group or its affiliate, Alibaba Group Holding Ltd., without involving external entities. However, regulators have reportedly informed Ma that he cannot sell his stake to individuals or entities close to him and instead must fully exit. Another option could be for Ma to transfer his stake to a Chinese investor affiliated with the state.

Notably, any decision regarding Ma’s exit would require approval from Beijing. It remains unclear whether Ant Group and Ma will proceed with a divestment option and, if so, which approach they will choose. Ant Group has denied the consideration of a divestment of Ma’s stake.

These discussions between Ant Group, Chinese regulators, and Ma have occurred amidst a broader regulatory crackdown on China’s technology sector. This crackdown began after Ma publicly criticized regulators in a speech last October. Since then, Alibaba, which Ma also founded, has faced investigations and new regulations, leading to a significant fine from China’s antitrust regulator. Ant Group, which had been ready to launch the world’s largest initial public offering, abruptly halted its plans following Ma’s meeting with regulators in November.

Ma’s potential exit from Ant Group could potentially enable the company to revive its IPO plans. However, the final decision regarding Ma’s stake and control over the company will ultimately rest on Beijing’s approval.

It is important to note that while Ma stepped down from corporate positions, he still holds effective control over Ant Group and wields considerable influence over Alibaba. Through related entities, Ma exercises control over Ant Group, despite only owning a 10% stake in the company.

This recent development underscores Beijing’s stance on technology firms in China. While the government supports the growth and global leadership of these companies, it also seeks to manage their influence and prevent excessive power. The regulatory actions against Ma and his companies serve as a reminder that China’s government will intervene if it believes technology firms are overstepping their bounds.

The future of Jack Ma’s involvement in Ant Group remains uncertain, but these discussions represent a potential turning point for both him and the company. As the regulatory landscape continues to evolve, it remains to be seen how Chinese regulators will handle Ant Group and other technology giants in the future.

Useful links:
Ant Group’s Possible Discussions with Founder Jack Ma About Divesting
Jack Ma could exit big stake in Ant Group: Reports