The source familiar with the regulators’ thinking has direct knowledge of conversations between Ant and officials,while one of the sources with company ties has been briefed on Ma’s interactions with regulators and Ant’s plans. The other one has direct knowledge of Ant’s discussions about options. They requested anonymity because of the sensitivity of the situation.
The Ant spokesman did not provide any comments from Ma. Alibaba referred questions to Ant. Jack Ma’s office did not respond to Reuters’ request for comment made via Ant. The State Council Information Office,PBOC,and CBIRC,also did not respond to requests for comment.
The high-stakes discussions come amid a revamp of Ant and a broader regulatory clampdown on China’s technology sector that was set in motion after Ma’s public criticism of regulators in a speech in October last year.
Ma’s exit could help clear the way for Ant to revive plans to go public,which stalled after the tycoon’s speech,both sources proximate to the company said. Ant,which was about to raise an estimated $US37 billion ($48 billion) in what would have been the world’s largest initial public offering,aborted plans the day after Ma’s November 2 meeting with regulators.
Since then Beijing has unleashed a series of investigations and new regulations that have not only reined in Ma’s empire but also swept across the country’s technology sector,including other high-profile,billionaire entrepreneurs.
For Ma,56,who also founded Alibaba and once commanded cult-like reverence in China,the consequences have been particularly severe. The tycoon completely withdrew from the public eye for about three months and has continued to keep a low profile after a brief January appearance.
‘China still likes to promote its technology firms as global leaders just as long as they don’t get too big for their britches.’
Andrew Collier,Orient Capital Research
China’s antitrust regulator fined Alibaba a record $US2.75 billion on April 10 following an antimonopoly probe that found it had abused its dominant market position for several years. A couple of days later Ant was asked by the central bank to become a financial holding company,bringing it under the ambit of banking rules that it had managed to avoid so far and allowed it to grow rapidly.
“China still likes to promote its technology firms as global leaders just as long as they don’t get too big for their
britches,” said Andrew Collier,managing director of Orient Capital Research.
Although Ma had previously stepped down from corporate positions,he retains effective control over Ant and significant influence over Alibaba.
While he only owns a 10 per cent stake in Ant,Ma exercises control over the company through related entities,according to Ant’s IPO prospectus.
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Hangzhou Yunbo,an investment vehicle for Ma,has control over two other entities that own a combined 50.5 per cent stake of Ant,the prospectus shows. Yunbo can decide all matters related to Ant and exercise the combined voting power of the three entities,the prospectus shows.
Ma holds a 34 per cent equity interest in Yunbo,the prospectus shows.
One of the sources with company ties said there’s “a big chance” Ma would sell his equity interest in Yunbo to exit from Ant,ultimately paving the way for the fintech major to move closer to completing its revamp and reviving its listing.
Reuters could not reach Yunbo for comment. Ant did not provide a comment on behalf of Yunbo.
Reuters