Storied Internet entrepreneur Jack Ma is reportedly being forced by Chinese authorities to make a complete withdrawal from his fintech and payments platform Ant Group.
The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) raised the possibility of Ma making an exit from Ant Group during “regulatory discussions” held in January and March, according to several sources who spoke to Reuters.
While an obvious option for Ma would be to sell his multi-billion dollar stake in Ant Group to Alibaba or another existing investor, Chinese regulators reportedly said that he would not be allowed to transfer his equity to any individuals or affiliates closely associated with him.
According to sources Chinese regulators have instead required that he make a complete exit from Ant Group, with any transactions to be made contingent upon their approval.
Ma currently holds a 10% stake in Ant, yet continues to wield control over the platform by means of other entities. Hangzhou Yunbo, an investment vehicle 34% owned by Ma, holds a combined 50.5% stake in Ant via two of its subsidiaries, according to Ant’s IPO prospectus.
Jack Ma’s sprawling e-commerce and fintech empire has come under heavy pressure from Chinese regulators over the past six months.
Last year Chinese financial authorities scuppered the mammoth USD$37 billion listing of Ant Group on the Hong Kong and Shanghai bourses, just days before it was scheduled to take place in early November.
Ant Group executives including Jack Ma were summoned for disciplinary “regulatory discussions” by Chinese authorities, who required that the company return to a focus on its payments origins, as well as convert into a financial holding company in order to expedite regulatory scrutiny.
Jack Ma’s flagship Alibaba e-commerce platform was also made the object of an anti-trust investigation by Chinese authorities, which culminated in the issuance of a multi-billion dollar fine on 10 April.