News: China’s Ant Group CEO leaves after failed IPO prompts revamp.
(Reuters) – China’s Ant Group Chief Executive Officer Simon Hu has resigned unexpectedly after regulatory overhaul of the financial technology giant’s business. This marked the top management’s first exit since a $ 37 billion initial public offering.
Hu, who was named chief executive of Alibaba Group Holding’s subsidiary in 2019, will be replaced by veteran and executive chairman Eric Jing, Ant said in a statement Friday.
Hu left the company as Ant worked on plans to move to a financial holding company structure after strong regulatory pressures to subject it to similar rules and capital requirements as banks.
That pressure abruptly affected Ant’s IPO last year, which would have been the largest in the world.
Hu resigned for personal reasons, Ant said in a statement without elaborating on it.
“After thorough discussions by the board of directors, we decided to respect Simon’s personal request and to support him fully in his new mission,” said Jing in an internal memo, the excerpt of which was seen by Reuters.
Jing will continue his current role as chairman, he said.
US-listed stocks of billionaire Jack Ma’s Alibaba fell as much as 3.9% in morning trading on Friday.
Hu’s departure is the first major change in management since going public. He was one of the key executives who were responsible for managing the company’s mega-dual listing in Hong Kong and Shanghai.
Ma’s business empire was at the center of action after an October 24 speech in which he blew up China’s regulatory system.
Since then, regulators have taken a closer look at the country’s tech sector, with Alibaba taking on much of the heat. The regulator launched an official antitrust investigation into Alibaba in December.
Ma, who is not known to shy away from the limelight, disappeared from the public eye for about three months, sparking furious speculation about his whereabouts. He reappeared in a 50-second video appearance in January.
Ant’s financial holding structure is expected to weigh on valuation as the fintech company has been valued as a technology company in its previous rounds of donations. Typically, tech companies have much higher ratings than financial companies.
The management change also comes days after some Ant employees posted on social media their frustration at not being able to sell their own company shares after Chinese regulators abruptly halted the company’s market debut.
Jing told Ant employees that the company will review its employee incentive programs and start rolling out some measures starting April to help resolve their financial problems, according to two people who saw the news.
The November listing of Ant, whose businesses include consumer credit and insurance products distribution, would have turned some of the company’s employees into millionaires or billionaires.
Although Ma has stepped down from corporate positions and earnings calls, he remains instrumental in influencing Alibaba and Ant and promoting them at business and political events around the world.
Hu joined Ant in 2005 and, according to his LinkedIn profile, has worked in various roles in the group and at Alibaba.
Jing has served as Ant’s CEO since 2018. Before that, he held various positions with the company, including President and Chief Operating Officer. This can be seen from his profile on the World Bank website. He joined Alibaba in 2007.
Reporting by Yingzhi Yang and Cheng Leng in Beijing, Sumeet Chatterjee in Hong Kong and Eva Mathews in Bengaluru, editing by Shailesh Kuber and Emelia Sithole-Matarise
Original Source © Reuters