China’s central bank has confirmed that Ant Group’s mobile payment app, Alipay, has no controlling entity, marking a significant step in the fintech giant’s restructuring process necessary to rejuvenate its much-awaited initial public offering.
The restructuring resulted in a decrease in founder Jack Ma’s voting rights from 53.46% to just 6.21%. This change is expected to pave the way for Ant to relaunch its public listing, which was previously disrupted in 2020 following a provocative speech by Ma.
Ma’s voting rights have now been divided between Hangzhou Junhan Equity Investment, jointly owned by Ma and four others, holding 31.04% of voting rights, and Hangzhou Junao Equity, another company owned by five individuals, possessing 22.42% of voting rights. The voting shares of these companies align with their ownership stakes.
The People’s Bank of China declared its decision on Alipay.com Co, one of Ant’s primary entities in China, on its website on Saturday. Ant Group is the financial technology affiliate of Alibaba Group Holding, which owns South China Morning Post.
An Ant spokesperson stated that the “optimization of corporate governance announced on January 7, 2023, is now complete and will have no effect on the company’s daily business operations”.
When the restructuring was first announced in January, Ant stated that the new shareholder structure would make the company “more transparent and diversified…enabling steady development”.
After the announcement, Dai Ming, a fund manager at Huichen Asset Management in Shanghai, expressed optimism. He viewed it as a “clear signal” of the government easing restrictions on big tech platforms in China, and as a step forward for Ant to revive its listing.
Wang Pengbo, a senior financial analyst at BoTong Analysys consultancy, also shared Dai Ming’s perspective, believing the new structure would be beneficial for Ant’s long-term development.
“Although a listing in the immediate future is very unlikely … [the change] paves the way for it to go public in future,” Wang added.
Since 2021, Ant Group, based in Hangzhou, has undergone several restructuring steps following the abrupt termination of its planned dual listing in Shanghai and Hong Kong the previous year.
In its announcement in January, the company stated that it would add a fifth independent director, resulting in the board of nine members being composed of over half the independent directors. To further separate itself from Alibaba, the e-commerce giant from which it originated, certain executives have left the Alibaba Partnership, which comprises the company’s most influential executives. These include Ant’s Chairman and CEO, Eric Jing Xiandong, and former CEO, Simon Hu Xiaoming.
The mobile payments industry is expected to face more stringent regulations in the coming year. The State Council already issued rules for non-banking payment institutions earlier this month, and stricter licensing rules are set to come into effect in May.
