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Jack Ma’s Alibaba empire to be broken up after Beijing crackdown

Jack Ma - AP Photo/Mark Schiefelbein, File
Jack Ma - AP Photo/Mark Schiefelbein, File

Alibaba is planning to carve up Jack Ma’s e-commerce empire after a regulatory crackdown by Beijing on China’s technology sector.

The Chinese online retail giant, which is listed in both Hong Kong and the US and valued at around $230bn (£187bn), will split its business into six units, each of which will have its own chief executive and board of directors.

Several of the new businesses would then seek to achieve further independence by selling shares to outside investors or listing on the stock market.

The planned shake up comes a day after Mr Ma, the 58-year-old founder of Alibaba, returned to mainland China after several months without an official appearance.

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The long absence of Mr Ma, who once impersonated Michael Jackson in a dance performance for thousands of his employees, came after he criticised China’s regulators in 2020, leading to a backlash against the country’s domestic tech sector.

The billionaire has since kept a low profile and largely avoided official functions and public events, although reports emerged on Monday that he had been spotted touring a school in the Chinese city of Hangzhou that is funded by Alibaba.

China’s regulatory crackdown has weighed on Alibaba’s share price, which has fallen around 70pc since November 2020, when Mr Ma attracted the ire of Beijing officials.

Mr Ma had been engineering a float of Ant Group, a financial payments company spun-out of Alibaba, a blockbuster deal that would have valued the business at around $300bn.

But he clashed with China’s banking and payments regulators, leading them to block the deal and sending Alibaba’s shares plunging.

Since then, Alibaba has been hit with billions of dollars in fines from China’s regulators over monopoly concerns amid a wider clamp down on tech companies and their billionaire founders.

In January, Mr Ma also gave up his controlling shareholding in Ant Group.

Alibaba said the decision to carve up the group would unlock the value of the group’s various businesses, which include interests in food delivery, logistics and film and TV production.

The company’s cloud division will continue to be headed by Daniel Zhang, the group’s overall chief executive, while its ecommerce business will remain fully owned by its main listed holding company.

The company said: “We will have six major business groups and other investments, each to be independently managed by its own chief executive officer and board of directors.

“Each business group will also have the flexibility to raise outside capital and potentially to seek its own IPO.”