Under pressure from Chinese authorities, Chinese fintech giant Ant Group has undergone comprehensive business reforms in recent years. On the 29th, the People’s Bank of China announced that it has agreed to let the Chinese payment giant Alipay change its actual controller, which means that the original controller, Jack Ma, has officially exited Alipay’s decision-making process.
According to the announcement of the “Non-Bank Payment Institutions Major Matters Change License Information Announcement (as of December 2023)” recently published on the official website of the People’s Bank of China, the People’s Bank of China has approved the change of Alipay (China) Network Technology Co., Ltd. to have no actual controller. This means that the original controller, Alibaba Group founder Jack Ma, has officially exited Alipay’s decision-making process.
Previously, two companies, Heng Seng Electronics and China Taiping Insurance, also announced on December 29th that due to the completion of the change in Ant Group’s major shareholder voting rights structure, Ant Group has become an entity without an actual controller. As affiliated companies, Heng Seng Electronics and China Taiping Insurance have also become entities without actual control.
According to China’s “Regulations on the Acquisition of Listed Companies,” 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 single director or senior manager can control significant financial and operational decisions of the company, among other conditions.
Jack Ma loses control of 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 systems and align shareholder voting rights with their economic interests, the major shareholders of Ant Group and related beneficiaries planned to implement equity changes.
The core of the equity change is the change in the voting rights of Ant Group’s major shareholders. Previously, Jack Ma and his concerted action parties exercised voting rights together. After the adjustment, 10 individuals, including Ant Group’s management, employee representatives, and founder Jack Ma, independently exercise their voting rights. This has led to a significant reduction in Jack Ma’s voting rights from 53.46% to 6.208%.
Before 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 their voting rights for the shares they hold, without any concerted action relationship. No individual or group of shareholders has control over Ant Group at the level of the shareholders’ meeting, and there is no situation where the number of directors nominated by shareholders exceeds half of the total number of directors.
Therefore, there is no longer any situation where any individual or group of shareholders directly or indirectly controls Ant Group.
Previously, China had just issued the “Regulations on the Supervision and Administration of Non-Bank Payment Institutions.” It will be implemented from May 1, 2024. The regulations require non-bank payment institutions to comply with laws and administrative regulations, follow the principles of safety, efficiency, integrity, and fair competition, and provide small, convenient payment services as their purpose, while safeguarding national financial security and not harming national interests, public interests, and the legitimate rights and interests of others.
Sun Yuchen sarcastically comments on decentralization
At the same time as Alipay changed its actual controller, the founder of TRON, Sun Yuchen, expressed his feelings on the 30th:
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China
Alipay
Entity without actual controller
Ant Group
Jack Ma