Jack Ma, founder of Chinese tech giant Ant group will cease control of the company upon the readjustment of its upper-tier shareholding structure. According to an official announcement of Ant Group on 7 January, the tech company will change the exercise of voting rights of its major shareholders upon share restructuring.
It will change from Jack Ma exercising voting rights jointly with persons acting in concert, to each of ten individuals (including the founder, representative of our management and employees) exercising their voting rights independently.
The adjustment is being implemented to further enhance the stability of Ant Group’s corporate structure and sustainability of our long-term development, according to the company. This also aims to further optimise corporate governance and to align the voting interests of shareholders with their economic interests.
The adjustment will not result in any change to the economic interests of any shareholders of Ant Group and their beneficiaries. “The shareholding structure of Ant Group will be more transparent and diversified, which will facilitate the steady development of the company. The adjustment will not affect the day-to-day operations of Ant Group,” the statement read.
Currently, 53.46 % of Ant Group's shares are divided between Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Investment Partnership. Ma owns 34% of the equity interests of Hangzhou Yunbo, while other shareholders hold 22% each.
Ma effectively can exercise control over the voting results of general meetings of Yunbo Investment for matters relating to the exercise of its rights as a shareholder of Ant Group, and therefore indirectly controls the voting rights represented by the 53.46% of the shares of Ant Group held through Hangzhou Junhan and Hangzhou Junao. As a result, Ma is deemed to be the control person of Ant Group prior to the Adjustment.
However, the latest arrangement will result in Ma, Eric Xiandong Jing, Simon Hu and Fang Jiang terminating their acting-in-concert arrangement for the voting of shares of Yunbo Investment.
Yunbo Investment will withdraw from Hangzhou Junhan as its partner. Hangzhou Xingtao will be admitted to Hangzhou Junhan to replace Yunbo Investment as the general partner and executive partner of Hangzhou Junhan. Each of Ma, Cyril Xinyi Han, Yu Zhang, Chenli Huang and Yun Zhou will hold 20% of the equity interests in Hangzhou Xingtao.
Upon completion of the adjustment, major shareholders of Ant Group, including Hangzhou Junhan and Hangzhou Junao, will independently exercise their voting rights in Ant Group. No shareholder will, alone or jointly with another shareholder, have the power to control the outcome of Ant Group’s general meetings. No shareholder will have the power to nominate the majority of Ant Group’s board of directors, and hence, having control over Ant Group.