Ant Group Denies Exploring Jack Ma’s Exit After Explosive Report

Ant Group strongly denied that the company ever considered the option of having founder Jack Ma sell his stake in the company to help end ongoing scrutiny from the Chinese government. The fintech giant was responding to an explosive Reuters report which cited anonymous sources alleging that the option was indeed being considered.

Sources told Reuters that officials from China’s central bank (People’s Bank of China) and financial regulator China Banking and Insurance Regulatory Commission met separately with Ma and Ant between January and March, where the possibility of the billionaire’s exit was raised.

One Reuters source said the company hoped Ma’s stake could be sold to existing investors in Ant or sister company Alibaba. But another source claimed that the billionaire was told, during his talks with regulators, that he wouldn’t be allowed to sell his shares to any entity or persons close to him – though the door was open for him to transfer his stake to a Chinese investor affiliated with the state.

Reuters said it couldn’t tell if Ant and Ma would ultimately proceed with a stock divestment option – or which one. Not long after the article was published, Ant tweeted that the story was “untrue” and “baseless”, adding that, “Divestment of Mr. Ma’s stake in Ant Group has never been the subject of discussion with anyone.”

Ma’s companies have been in government crosshairs ever since he criticised China’s regulatory system last October. Chinese authorities scuttled Ant’s high-profile IPO in November and initiated an anti-monopoly probe against Alibaba in December, which recently culminated in a CNY 18.23 billion (~RM11.5 billion) fine.

Jack Ma’s Ant Group Reaches Restructuring Deal With China’s Regulators

According to a deal brokered with Chinese regulators, Jack Ma’s fintech firm Ant Group will be transformed into a financial holding company, making it subject to capital requirements just like banks. Bloomberg first reported on the agreement, and, citing unnamed sources, said it would place all of Ant’s businesses into the holding company, including its blockchain and food delivery offerings.

Bloomberg’s sources said the plan could be officially announced before the Chinese New Year holiday next week. This would represent a significant turnaround for Ant Group, which (along with famous sister company Alibaba) had been under intense scrutiny by Chinese authorities since Ma made critical remarks about Chinese regulatory system last year.

Chinese regulators famously scuttled Ant Group’s much-anticipated IPO in November. Then they demanded that the company return to its roots as a payment services provider, apparently unhappy that it had branched out into consumer loans and wealth management. In the recent weeks, they’ve ordered the firm to rectify its businesses and comply with regulatory requirements, leaving the door open for the resumption of the IPO if demands are met.

Indeed, a source told Bloomberg that Ant Group is exploring ways to resume its IPO. But given that various new financial regulations are still being rolled out  in China, the timeline on that isn’t clear. Ma himself has diligently kept out of the public spotlight, only resurfacing recently to address teachers.