Embattled Jack Ma has relinquished his absolute control over Ant Group following the new changes to the corporate structure. Under the new arrangement, Jack Ma will split his authority into equal parts with other shareholders.
Ant Group made the disclosure in a press statement, describing the move as a “corporate governance optimization” designed to “achieve long-term sustainable development.” The major difference in the restructuring process is the alignment of the voting interest of the Group’s major shareholders in its upper tier.
Before the change, Alibaba founder Jack Ma exercised control over the firm with his 34% majority stake, with Ma exercising his voting rights with other individuals acting in concerts.
Under the new rules, Eric Xiandong Jing, Simon Hu, and Fang Jiang will end their “acting-in-concert” arrangement, while equity transfers would see their equity interests in Yunbo investment be pegged at 20%. Jack Ma, Cyril Xinyi Han, Yu Zhang, Chenli Huang, and Yun Zhou will collectively control 20% of equity interests in Hangzhou Xingtoa.
The new arrangement will see the shareholders in both entities pledge to “undertake to independently exercise their respective rights.” The undertaking will include agreements to not participate in “concert party arrangement” and not make any moves that would lead to gaining more control over Ant Group.
“No shareholder will, alone or jointly with another shareholder, have the power to control the outcome of Ant Group’s general meetings. No shareholder will have the power to nominate the majority of Ant Group’s board of directors,” the statement read.
Other radical changes to the firm’s structure include increasing independent directions and forming three sub-committees bordering on risk management, consumer rights, and sustainable development.
Charting the path for a brighter future
Experts have predicted that the corporate restructuring move will benefit the company in the long run, paving the way for a brighter future with an IPO in sight.
“It paves the way for it to go public in the future, although a listing in the immediate future is very unlikely,” Wang Pengbo, a financial analyst at BoTong Analysys, said.
The market reacted to the restructuring news enthusiastically, with Alibaba shares climbing by 10% in under a day.
Analysts have also expressed a belief that the restructuring will allow the company to focus on its exploration of distributed ledger technology (DLT) in the coming months. Ant Group has already dipped its feet into DLT with the launch of a DLT-backed storage engine.
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