Under pressure from Chinese authorities, Chinese fintech giant Ant Group has undergone comprehensive business restructuring in recent years. In an announcement on December 29th, the People’s Bank of China (PBOC) stated that it has agreed to allow China’s payment giant Alipay to change its actual controller, meaning that the original controller, Jack Ma, officially exits Alipay’s decision-making.
According to the announcement of “Major Changes in Non-Bank Payment Institutions’ License Information (as of December 2023)” on the official website of the PBOC, Alipay (China) Network Technology Co., Ltd. has been approved to change its actual controller. This means that the original controller, Jack Ma, founder of Alibaba Group, officially exits Alipay’s decision-making.
Prior to this, two companies, Hang Seng Electronics and China Taiping Insurance, also announced on December 29th that as the major shareholder voting rights structure of Ant Group has changed, Ant Group has become an entity without an actual controller. As associated companies, Hang Seng Electronics and China Taiping Insurance have also become entities without actual controllers.
According to the “Regulations on the Acquisition of Listed Companies” in China, an entity without an actual controller means that the equity structure of a listed company is dispersed, with no controlling shareholder holding more than 50% of the shares, and no individual director or senior executive having control over major financial and operational decisions of the company, among other conditions.
Jack Ma loses control over Alipay and Ant Group
Alipay is wholly owned by Ant Group. In January of this year, Ant Group announced on its official website that in order to further adapt to the requirements of modern corporate governance and align shareholder voting rights with their economic interests, it planned to implement equity changes. The core of the equity changes is the variation of the major shareholder voting rights of Ant Group, from Jack Ma and his concerted action parties exercising voting rights together, to 10 individuals including Ant Group’s management, employee representatives, and founder Jack Ma independently exercising voting rights. As a result, Jack Ma’s voting rights decreased significantly from 53.46% to 6.208%.
Prior to the adjustment, Jack Ma was the actual controller of Ant Group. After the adjustment, the major shareholders of Ant Group, including Hangzhou Junhan and Hangzhou Junao, independently exercise the voting rights of their Ant Group shares, without any concerted action relationship, and no single or combined shareholders have control over Ant Group at the shareholders’ meeting level, nor are there any situations where the number of directors nominated by shareholders exceeds half of the total number of directors.
Therefore, there is no longer any situation where a single or combined shareholder directly or indirectly controls Ant Group.
Previously, China had just issued the “Regulations on the Supervision and Administration of Non-Bank Payment Institutions.” Effective from May 1, 2024, these regulations require non-bank payment institutions to comply with laws and regulations, adhere to the principles of safety, efficiency, integrity, and fair competition, provide small and convenient payment services, and safeguard national financial security without harming national interests, public interests, and the legitimate rights and interests of others.
Sun Yuchen sarcastically mentions decentralization
At the same time as Alipay changes its actual controller, Sun Yuchen, the founder of Tron, expressed his thoughts on December 30th:
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Related reports:
– China’s central bank interviews “Alipay and major banks” and announces a comprehensive ban on cryptocurrency trading
– Alipay enters the digital RMB pilot! Some users can apply for “Internet Commercial Bank” DCEP wallet
– Crisis for Alipay and WeChat? China’s State Administration for Market Regulation officially issues new “Anti-Monopoly Guidelines”
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China
Alipay
Entity without actual controller
Ant Group
Jack Ma