Jack Ma No Longer “In Control” Of Ant Group: Shareholding Adjustments Snatches Away Voting Rights?

Jack Ma, who founded the Ant group, is no longer "in control" of the technological and financial behemoth he created. Ma has relinquished most of his voting rights, confirmed the Ant group today. Ma previously possessed more than 50 percent of voting rights at the Ant group, which meant he could effectively overturn any decision even without the consensus of the board members.

Jack Ma Is No Longer The "Decision Maker" At Ant Group

Jack Ma had indirect majority voting rights in the Ant group. He is the founder of the Ant group, a huge fintech company in China. Ma is also the founder and executive chairman of China's Alibaba Group, one of the largest e-commerce platforms not only in China but across the world.

Ma owns a mere 10 percent stake in the Ant group, an affiliate of Alibaba Group Holding Ltd. However, he could exercise absolute control over the company through related entities.

Ant's IPO prospectus filed with the exchanges in 2020 revealed Ma effectively possessed more than 50 percent voting rights at Ant. The prospectus revealed Hangzhou Yunbo, an investment vehicle that Jack Ma controlled, had control over two other entities that own a combined 50.5 percent stake in Ant.

How Will The Ant Group Operate Now?

Ant group's shareholders have agreed to implement a series of adjustments that will ensure Jack Ma no longer has the majority voting rights. Although difficult to tell for certain, it is estimated that Ma's share could fall to 6.2 percent after the restructuring.

Essentially, 10 individuals, including the founder, management, and employees, will now get voting rights "independently". Previously, Ma and nine other major shareholders acted in concert when exercising their voting rights. This meant Ma could exercise his will, even by going against the board.

Ant will reportedly add an Independent Director to its board as a precautionary measure. This will make independent directors a majority of the company's board. Currently, the Ant group has eight board directors. This is being done to ensure no direct or indirect shareholder will have sole or joint control over Ant Group, said the company.

Jack Ma, once the poster child of China, had fallen out of favor with the Chinese Communist Party after he had criticized some of its policies. The latest development is yet another blow to Ma, who could not execute Ant's $37 billion IPO in late 2020. This colossal setback forced the restructuring of the financial technology giant.