Ant Financial is seeking options for its founder Jack Ma to divest his stake in the fintech giant and relinquish control, according to a source familiar with the regulator’s thinking and two people close to Ant Financial, as meetings with Communist Party regulators signaled to the company that the move could help end Beijing’s scrutiny of its business.
Reuters first reported details of the latest round of meetings and Ma’s discussions on the future of Ant Financial’s control, which are being structured through a complex investment vehicle. The Wall Street Journal previously reported that Ma proposed handing over parts of Ant Financial’s business to the Communist government in a meeting with regulators last November.
Officials from the People’s Bank of China and the financial regulator China Banking and Insurance Regulatory Commission held separate meetings with Ma and Anthem from January to March to discuss the possibility of Ma’s exit from the company, according to a source familiar with the regulator’s thinking and close to the company.
Anthem denied it had considered divesting Ma’s stake. “Divesting Jack Ma’s stake in Ant Group was never a topic of discussion with anyone,” an Ant spokesman said in a statement.
Reuters could not determine whether Anthem and Ma would go ahead with the withdrawal option and, if so, which party would. A source with ties to Anthem said the company hopes Ma’s multibillion-dollar stake could be sold to Anthem’s existing investors or its e-commerce subsidiary Alibaba Group Holding Ltd. without involving any outside entities.
But in discussions with regulators, Ma was told he would not be allowed to sell his holdings to any entity or individual with close ties to him, but would have to exit altogether, another source from the company’s relations said. Another option would be to transfer his holdings to a Chinese investor with ties to the government, the source said.
Two sources with knowledge of the company’s thinking said any move would need to be approved by Beijing.
All three sources provided information consistent with a timeline of how discussions have progressed over the past few months. On the company side, one source said Jack Ma met with regulators more than once before the Chinese New Year. Another source said Anthem began looking at options for Ma’s possible exit months ago. Ant Financial Services told officials at a meeting before mid-March that it was looking at options, sources familiar with the regulator’s thinking said.
The source familiar with the regulator’s thinking has direct knowledge of conversations between Anthem and officials, while a source with ties to the company has been briefed on Ma’s interactions with regulators and Anthem’s plans. Another person has direct knowledge of Anthem’s discussions about options. They asked to remain anonymous because of the sensitivity of the situation.
An Anthem spokesman did not provide any comment from Ma. Alibaba referred questions to Ant Financial Services. Ma’s office did not respond to a request for comment from Reuters via Ant Financial Services.
The discussions at stake come at a time of reform at Ant Financial and a broader regulatory crackdown on China’s tech sector. The crackdown was launched last October after Jack Ma publicly criticized regulators in a speech.
Ma’s exit could help clear the way for Ant Financial to restart its plans to go public, which stalled after Ma’s speech, two sources close to the company said.
Anthem scrapped its plans after Ma met with regulators on Nov. 2 last year, and the company had planned to raise about $37 billion in an initial public offering (IPO) that would have made it the world’s largest.
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