China’s Ant Group Successfully Removes Jack Ma, Highlighting Unique Corporate Structure

Almost a year after billionaire Jack Ma pledged to relinquish control of Ant Group Co., the company has successfully completed the necessary steps to remove its controlling stakeholders. The People’s Bank of China has approved the application to eliminate any controlling shareholders at Ant’s Chinese payment platform, Alipay. Consequently, the central bank now recognizes Alipay as a company without a definitive controller.

Ma, co-founder of Alibaba Group Holding Ltd, announced earlier this year that he was pulling out of Ant as one of several moves to appease Chinese regulators. In January, the financial firm said 10 people, including management and staff, would be offered voting rights, removing the billionaire’s control. The adjustments do not change the shareholders’ financial interests.

The change in status with the central bank does not affect the company’s daily business, Antti’s spokesperson responded to the central bank’s statement.

Alibaba ousts commerce chief, shares assets in New Shakeup

Alibaba Group Holding Ltd. replaced one of its most experienced executives at the helm of e-commerce and plans to create a company that will oversee its investment assets around the world. This is the latest change in a series that has led to the once-dominant China online. juggernaut.

CEO Eddie Wu replaces Trudy Dai, who was one of the internal partners present when Jack Ma was founded in 1999, as head of the division that runs Alibaba’s main Chinese e-commerce platforms, Tmall and Taobao. Instead, Dai will help set up the entity to manage a portion of its vast portfolio of assets around the world. Alibaba, whose investments include stakes in startups and businesses ranging from entertainment to physical retail, described the non-core assets of the company that oversees this entity without elaborating.

Alibaba shares rose 2.7% in Hong Kong on Wednesday.

The surprise decision comes as Alibaba seeks to rejuvenate the company after a series of missteps and regulatory scrutiny that have undermined its dominant market position in recent years. Dai’s departure marks the latest change in the Chinese corporate icon, which has weathered post-Covid spending volatility, years of government crackdowns and, most recently, the surprise rise of rivals such as PDD Holdings Inc and ByteDance Ltd.

Wu, who himself took over Alibaba just months ago, plans to groom new leaders to guide his company for the long term. The decisions made so far may reflect a desire to take direct control of underperforming divisions, while looking at selling businesses deemed less essential to the cloud, retail and logistics divisions.

“Alibaba wants to go into battle with light packaging, and this is a way to manage many of its heavier and non-core businesses,” said Li Chengdong, head of Beijing-based internet think tank Haitun. “They hinder the company’s overall competitiveness and flexibility.”

Alibaba, once China’s most valuable company, has fallen behind games and social media leader Tencent Holdings Ltd. It lost its position as China’s most valuable e-commerce operator to eight-year-old bullish PDD, which has far outpaced Alibaba’s growth. with the help of the hit shopping app Temu.

Ma, arguably China’s most famous entrepreneur, broke years of silence in November to call workers to arms after years of brutal government punishment and a string of volatile decisions in 2023.

Earlier this year, the company announced a plan to split itself into six parts — then walked back on the plan and fired former CEO Daniel Zhang. It shed its $11 billion cloud division, which some investors wanted, and said the company needed a “reset.”

“We must face our past and transform ourselves for the future,” Alibaba Chairman Joseph Tsai said in an internal memo announcing the latest changes to employees on Wednesday. “Soon we will empower a new group of managers who have developed basic skills and experience from the bottom up.”

Alibaba is now bent on regaining lost ground and reinvesting in cloud services and e-commerce – two of its biggest businesses.

“E-commerce under threat is a problem for the entire enterprise,” said TechMoat Consulting partner Jeffrey Towson. “They need a wartime CEO for e-commerce.”

With Wu leading both core businesses, he is expected to implement broader restructuring while looking for younger talent to take the helm. In his first letter to employees in September, Wu said the company wants its core leadership to be younger, including by promoting those born after 1985.

Executives have also talked about the need to review their investment portfolio to identify and create value for Alibaba’s assets. Dai is one of its most influential leaders, an engineer by training who around 2022 took over the leadership of Taobao and Tmall. China’s e-commerce division accounted for more than 40% of this year’s total turnover.

Alibaba reported a better-than-expected turnover in November, which was due to its overseas business and logistics company Cainiao.

However, it is unclear what the company plans to do with the ancillary operations and which of them will be merged into a holding company overseen by a committee under Tsai. These include video service Youku Tudou or its InTime chain of department stores, Li said.

“This is another big step to reverse Alibaba’s previous plan to step down under Daniel Zhang. Now Wu will take control of the group, the cloud and Taobao-Tmall and consolidate power at the group level,” said Forsyth Barr Asia research analyst Willer Chen. “There could be more sales of non-core assets in the future.”