Chinese fintech giant Ant Group gets approval for no-controller status, ending Jack Ma's reign before seeking IPO

China's central bank has agreed that Ant Group's mobile payment app Alipay has no controller, a crucial step in the fintech giant's overhaul deemed necessary to put its much-anticipated initial public offering back on track.

The restructuring saw the voting rights of founder Jack Ma shrink to just 6.21 per cent from 53.46 per cent. The move is seen as paving the way for Ant to resume its public listing that was derailed in 2020 following a controversial speech given by Ma.

The billionaire's share of the voting rights are now divided among Hangzhou Junhan Equity Investment - owned by Ma and four others with 31.04 per cent of voting rights - and Hangzhou Junao Equity, another firm owned by five other individuals with 22.42 per cent of voting rights. The companies' voting shares are equal to their ownership stakes.

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The People's Bank of China announced the decision concerning Alipay.com Co, one of Ant's major entities in China, on its website on Saturday. Ant is the fintech affiliate of Alibaba Group Holding, which owns the South China Morning Post.

An Ant representative said that its "corporate governance optimisation announced on January 7, 2023, has been completed and it will not affect the company's day-to-day business operations".

When it announced the change in January, Ant said the new shareholding structure will be "more transparent and diversified ... facilitating the steady development of the company".

"It's definitely a clear signal that the government has eased the curbs on China's big technology platforms," Dai Ming, a fund manager at Huichen Asset Management in Shanghai, said after the January announcement. "We can also say that it is a step forward for Ant to resume its listing."

Wang Pengbo, senior financial analyst at consultancy BoTong Analysys, also said at the time that the new structure would be "good for Ant's long-term development".

"Although a listing in the immediate future is very unlikely ... [the change] paves the way for it to go public in future," Wang added.

Hangzhou-based Ant has taken several steps to restructure since 2021, after the last-minute scuttling of its planned Shanghai and Hong Kong dual listing late the previous year.

In its January announcement, the company said it would add a fifth independent director, making up more than half of the nine-member board. To further cleave itself from the e-commerce giant it spun out of, certain executives have exited the Alibaba Partnership, a collection of the most powerful executives in the company. That included Ant chairman and CEO Eric Jing Xiandong and former CEO Simon Hu Xiaoming.

The mobile payments industry is set to face stricter regulations in the new year. The State Council earlier this month published rules on non-banking payment institutions, with tougher licensing rules taking effect in May.

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