(Bloomberg) – Ant Group denied a report that the Chinese financial technology company is investigating ways for founder Jack Ma to sell his stake and give up control as a means of easing pressure from the country’s regulators.
Reuters previously reported that officials from the People’s Bank of China and the China Banking and Insurance Regulatory Commission held separate talks with Ma and Ant between January and March, discussing the possibility of Ma’s departure. The report names people who are familiar with the case.
The company hoped Ma’s stake would be sold to existing shareholders in Ant or its e-commerce partner Alibaba Group Holding Ltd., Reuters said.
Ant issued a statement to the news agency saying that the sale of Ma’s stake was not being considered. The company reiterated the denial in a tweet following the report, saying that “the divestment of Mr. Ma’s stake in Ant Group has never been a topic of discussion with anyone.”
The Chinese government has put pressure on Ma’s internet empire as part of an effort to indelibly express her authority in the country’s technology industry. In milestone announcements this month, Alibaba was fined a record $ 2.8 billion for abusing its market dominance, and then ordered a review of Ant.
Read More: Jack Ma’s Double-Whammy Marks the End of China Tech’s Golden Age
In fact, Ant will be controlled more like a bank, a move with far-reaching implications for growth and its ability to continue with a historic IPO that the government abruptly postponed late last year.
Through the overhaul outlined by regulators and the company, Ant is transforming itself into a financial holding company, with authorities directing the company to open its payments app to competitors, increasing oversight of how that company is fueling critical consumer lending, and increase data protection. . It will also have to reduce the outstanding value of its Yu’ebao money market fund.
Bloomberg Intelligence senior analyst Francis Chan said in a report earlier this week that he expects Ant’s valuation to fall below 700 billion yuan ($ 107 billion) from 2.1 trillion yuan in an earlier effort to go public.
“Ant Group’s outlook could diminish further after China discontinues the improper linking of Alipay payments with Ant’s other products,” he said. “New curbs on Yu’ebao are also hurting his wealth business.”
Ant’s prospects are diminishing on Alipay’s disconnect from products: Reply
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