Jack Ma cedes control of Shanghai-listed financial software firm Hundsun Technologies amid Ant Group restructuring
- Ma, who indirectly held 20.72 per cent of the voting power in Hundsun Technologies, will no longer have control over the company
- The tech billionaire bought a controlling share of Hundsun in 2014, the same year that Ant Group was founded
Jack Ma will cede control of Shanghai-listed financial software provider Hundsun Technologies, after owner Ant Group overhauled its shareholding structure and diluted the voting power of its billionaire founder, in a move necessary to revive the much-anticipated initial public offering of China’s largest fintech company.
Ma, who indirectly held 20.72 per cent of the voting power in Hundsun, will no longer have control over the mainland Chinese company, according to its stock exchange filing released on Sunday.
The decision follows a number of steps that Ant has taken since 2021 to restructure and further cleave itself from its parent Alibaba, after the fintech giant’s initial public offering in 2020 was abruptly suspended. The company now plans to add a fifth independent director, making up more than half of the nine-member board.
Alibaba owns the South China Morning Post.
By giving up his control of Ant, Ma will no longer control Hundsun, in which Ant holds a controlling stake.
“Since no shareholder, alone or jointly with other parties, will have control over Ant Group … the actual controller of Hundsun Technologies will also be changed from Mr Ma Yun to no actual controller,” Hundsun’s statement read, referring to Ma’s Chinese name.
Founded in Hangzhou in 1995 as a financial information provider, Hundsun created one of China’s most popular trading software for securities and fund management companies. The company went public in Shanghai in 2003 and had a market capitalisation of 80.2 billion yuan (US$11.7 billion) as of Friday.
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Those equity shares were transferred to Ant a year later, giving the fledgling company the synergies it needed to rapidly expand in China’s fintech sector, with Ma still in effective control of the software provider.
In late 2014, Ant and Hundsun, along with state-owned entities China National Investment and Guaranty Corporation, announced they would jointly establish Zhejiang Santan Financial Information Service Co – a company that was widely viewed as a direct rival to Lufax Holding, an online wealth management marketplace associated with Ping An Group.
As with other major players in the industry, however, Hundsun’s business has been recently battered by economic headwinds and regulatory pressure.
The company reported a 98.3 per cent plunge in earnings to 11.5 million yuan in the first three quarters of 2022, while Ant (Hangzhou) Funds Sales, the mutual fund distribution arm of Ant Group, recorded a 74.5 per cent slump in net profit year on year to 82.85 million yuan in the first half of 2022.
