Jack Ma let go of Alipay

On December 29, the official website of the central bank issued an information announcement, agreeing to the change of Alipay (China) Network Technology Co., Ltd. to no actual controller.

This means that after more than a year of adjustment of the governance structure of Ant Group, it has come to an end, and Ma Yun has officially given up the status of Alipay's actual controller.

In the past 20 years of development, Alipay has been deeply branded by Jack Ma.

Now, tearing off Jack Ma's label, what does it mean for Alipay?

Jack Ma re-exerts financial skills

In fact, at the beginning of this year, Ant Group's equity adjustment has been initiated. After a year, the regulator finally agreed to the change of Alipay's actual controller at the end of the year.

On January 7, Ant Group released an announcement on its official website on continuously improving corporate governance. According to the announcement, in order to further adapt to the requirements of the modern corporate governance system and promote the matching of shareholders' voting rights with their economic interests, Ant Group's major shareholders and relevant beneficiaries plan to adjust the superstructure of Ant Group's shareholders, and the core of this adjustment is the change in the voting rights of Ant Group's major shareholders.

Prior to this adjustment, Ant Group's shareholding structure was shown in the following figure:

Although Jack Ma, Jing Xiandong, Hu Xiaoming and Jiang Fang respectively hold 34%, 22%, 22% and 22% of the equity interests of Hangzhou Yunbo Investment Consulting Co., Ltd. ("Yunbo Investment"), according to the company's current articles of association and the Concerted Action Agreement, Ma Yun can effectively control the voting results of the shareholders' meeting of Yunbo Investment and the exercise of Ant Group's shareholder rights, and thus indirectly control the voting rights of 53.46% of the shares of Ant Group.

In other words, before this adjustment, Jack Ma was the actual controller of Ant Group.

On January 7, the parties signed corresponding agreements and made a number of arrangements. Jack Ma, Jing Xiandong, Hu Xiaoming and Jiang Fang will terminate their concerted action relationship at the level of Yunbo Investment, and Jing Xiandong, Shao Xiaofeng, Ni Xingjun, Zhao Ying and Wu Minzhi will each hold 20% of the equity of Yunbo Investment through equity transfer.

After the adjustment, Ant Group's shareholding structure is shown in the following figure:

Ant Group said in the announcement that after the completion of the adjustment, there will no longer be any direct or indirect shareholders who control Ant Group alone or jointly.

Ant Group's announcement also said that since 2021, Ant Group has continued to improve its corporate governance, with four independent directors among the eight directors on its board of directors and six special committees. On this basis, it plans to continue to introduce a fifth independent director to achieve a majority of independent directors on the board of directors.

Now, with the central bank's approval of Alipay's change to no actual controller, it means that the adjustment has been approved by the regulator.

Whose Alipay?

Alipay's development path is quite legendary.

At the beginning of 2004, Ma Yun went to Switzerland to attend the Davos Forum, listened to the meeting for a day, and called his colleagues in China that night, "Immediately, now, immediately start Alipay." ”

At the end, I didn't forget to add: "If you want to go to jail, I'll go." ”

Since then, with the rapid development of Taobao, Alipay has gradually grown and its users have increased on a large scale.

Alipay is to solve the trust problem of Taobao, which is actually a guaranteed transaction payment. At that time, the electronic payment license was not released, and Ali faced certain legal risks as Alipay.

In order to obtain a third-party payment license, Ma Yun transferred the equity of Alipay twice.

The first was in June 2009, when a 70% stake in Alipay was transferred to a domestic enterprise wholly owned by Jack Ma and Xie Shihuang. The background is that in April of that year, the central bank required third-party payment companies to file for the record.

In June 2010, the People's Bank of China (PBOC) promulgated the Measures for the Administration of Payment Services for Non-Financial Institutions (Order No. 2), which requires that the measures for the administration of payment institutions for foreign investment, including the scope of business, the conditions and proportions of investors, shall be separately stipulated by the People's Bank of China and submitted to the State Council for approval.

In August of that year, Alipay transferred the remaining 30% of its equity to the above-mentioned domestic enterprise. The total price of the two transfers is about 330 million yuan.

After completing the equity transfer of Alipay, in the first quarter of 2011, Jack Ma and Alibaba terminated the agreement control of Alipay.

But the move caused an uproar.

As the first and second largest shareholders, Yahoo and SoftBank have questioned it. At one point, Yahoo said that the change of ownership of Alipay had not been approved by the board of directors or shareholders.

At that time, many American media believed that Jack Ma had "stolen" Alipay from shareholders.

Hu Shuli, a well-known media person, also commented that Ma Yun was wrong, and the mistake was that he violated the contractual principles that support the market economy, and the consequences should not be underestimated.

Ma Yun responded that in order to obtain a third-party license, Alipay's previous restructurings have had frank and open exchanges at the board level, and the board minutes clearly stated that the management was authorized to adjust Alipay's shareholding structure to meet the requirements of the central bank.

After a series of negotiations, in July 2011, Alibaba reached an agreement with Yahoo and SoftBank on the transfer of shares in Alipay.

Under the terms of the agreement, Alipay's holding company promised to give Alibaba Group a one-time cash return of 37.5% of Alipay's total market capitalization at the time of listing (based on the price of the initial public offering), which would be no less than US$2 billion and not more than US$6 billion. In addition, Alipay is required to pay 49.9% of its net profit before tax to Ali every year to pay for intellectual property licensing fees and software technical services.

On the eve of Alibaba's IPO in 2014, Alibaba, SoftBank, Yahoo, and Ant Financial adopted a new agreement on the basis of the above-mentioned framework agreement. On July 25, 2022, Alibaba and Ant Group further amended the Equity and Asset Purchase Agreement and the Alipay Commercial Agreement, with certain amendments taking effect on August 13, 2022.

After a series of equity adjustments, Ma Yun became the actual controller of Alipay.

Jack Ma commented that the equity transfer incident was "not perfect, but it was the only right decision at that moment".

Alipay Nirvana

The House of Finance and Economics noted that the event that had the greatest impact on Alipay was not the equity transfer, but on November 3, 2020, the regulator urgently called off its IPO in Shanghai and Hong Kong on the eve of Ant's listing.

Subsequently, on December 26, 2020, the financial management department interviewed Ant and put forward a rectification request. Among them, it is required to return to the origin of payment, improve the transparency of transactions, and strictly prohibit unfair competition.

On April 12, 2021, the financial management authorities jointly interviewed Ant Group again, mainly asking Ant Group to face up to the serious problems existing in its financial business activities and the seriousness of the rectification work, benchmark the regulatory requirements and the proposed rectification plan, and make in-depth and effective rectifications to ensure that it operates in accordance with the law, upholds integrity, innovates, and develops healthily.

On the evening of July 7, 2023, the boots of the punishment finally landed.

The financial management department announced a blockbuster fine of 7.123 billion yuan for Ant Group. This is the fourth "sky-high" fine in the history of the domestic Internet after Alibaba, Meituan, and Didi!

In response, Ant Group said, "We sincerely accept and resolutely obey the administrative penalty decision from the financial management department, and will further consolidate the level of compliance governance." ”

The House of Finance and Economics noted that at the business level, Ant Group not only took the initiative to reduce the scale of Yu'e Bao, but also isolated the brands of "Huabei" and "Borrow" in November 2021 to re-establish the brand positioning and clarify the party responsible for the loan. In December 2021, Ant closed Hubao and cut off MYbank.

Alibaba's fiscal year 2022 financial report shows that the two parties agreed to terminate the Data Sharing Agreement on July 25, 2022.

In terms of corporate governance, Ant Group hired Yang Xiaolei and Laura Shi as new independent directors in June 2022, increasing the proportion of independent directors on the board to 50%.

In July 2022, Alibaba's FY2022 annual report disclosed that relevant members of Ant Group's management, including Jing Xiandong, Ni Xingjun, Zeng Songbai, Peng Yijie, etc., no longer served as partners of Alibaba, strengthening their isolation from major shareholder Alibaba.

After the sky-high fine was issued, on the evening of July 7, the financial management department announced that it had promoted the rectification of the financial business of platform enterprises from the beginning to the end, and the focus of work was shifted to normalized supervision. Ant Group has also completed rectification and entered a new stage of development.

It's just that the market environment has changed dramatically, can Alipay return to its past glory?