At the end of 2023, the central bank agreed to change Alipay to no actual controller, which is wholly owned by Ant Group and subject to the daily supervision of the central bank.
Alipay's change to no actual controller actually had some clues as early as the beginning of 2023. At that time, Ant Group announced that in order to continuously improve the company's governance and achieve long-term sustainable development, Ant Group was ready to take upgraded measures at the board and shareholder level, including adjusting the voting rights structure of major shareholders and introducing more independent directors.
It is worth mentioning that Alipay is a subsidiary of Ant Group. According to Ant Group's listing prospectus at the time, Ant Group had a total of 70 subsidiaries in China, 98 overseas holding subsidiaries and 58 shareholding companies.
What will be the impact of this incident?
What needs to be known is that the central bank agrees that Alipay has no actual controller, which means that the central bank recognizes that there is no individual or group within Alipay or in its equity structure that can directly control Alipay, such as Jack Ma, or other co-founders or executives of Alibaba.
A company does not have an actual controller, which directly means that the company has lost the core person of decision-making, and all shareholders must sit together in a meeting to carry out big and small matters in the future, which also seems more fair and just. On the other hand, Alipay has no core figures, then all shareholders will be core figures, and Alipay will not be subject to anyone, even Ant Group, Hang Seng Electronics, Cathay Pacific Property Insurance, etc., behind Alipay.
Without the actual controller, this also means that Alipay will further strengthen its compliance and risk prevention in the future, because Alipay's future equity structure will be transparent, and there will be no so-called ambiguity of the actual controller.
There is no doubt that this practice will directly lead to a very serious problem, that is, there are more people who can point fingers at Alipay, which will inevitably lead to a significant reduction in Alipay's operational efficiency. After all, some things that can be resolved quickly have to rise to the level of the shareholders' meeting, which can drag on for days or even months.
However, there are also advantages, that is, Alipay's future decision-making will be more transparent and will take care of the interests of shareholders. Without an actual controller, it means that no one can be the master of Alipay, and Alipay will move towards a more stable operation in the future.
More importantly, this point actually played a crucial role in Ant Group's listing.
The reason why Ant Group's listing plan was suddenly halted was because Ant Group's leverage was too high, which was equivalent to building a temple in the air, and there was only one pillar supporting this palace.
According to mainland law, if a financial company wants to go public, the company's capital adequacy ratio must reach at least 30%, and how many of Ant Group are less than 1%!
How did Ant Group get its money? It is constantly using a sum of money to get more money. The average financial company will also increase leverage, but at most 3-5 times. What about Ant Group? 50-100 times! This kind of approach, which is almost crazy, once Ant Group is really listed, will be a disaster for the entire capital market.
Now it seems that Alipay is now regulated by the central bank, and the high valuation given by the capital market at the beginning is not to be considered. The reason why Alipay has been changed to no actual controller is to facilitate listing, because in fact, from a long-term perspective, it is more conducive to long-term development for the company to have no actual controller.
Taking foreign companies as an example, Apple, which now has a market value of $2.83 trillion, has no actual controller, and Cook is just a worker, and the top ten shareholders behind Apple hold only 25% of the shares, of which the largest shareholder is the American Pilot Group, which holds 6.63% of the shares. Apple's second largest shareholder is the American chaebol BlackRock Group, with a 4.29% stake. Warren Buffett, the American stock god, holds 2.52% of Apple's shares.
How much does Steve Jobs, the founder of Apple, own only 0.585 percent! However, this does not prevent Apple from becoming one of the largest technology companies of our time.
Apple can do it, why can't Alipay do it? Ant Group can't do it? Moreover, only China is using QR codes now, will it be possible to popularize QR codes abroad in the future? When foreigners use Alipay to transfer money, how big of a business will it be?
What's more critical is that Alipay will be supervised by the central bank in the future, which means that the money you put in Alipay is safer, and you don't have to worry about Alibaba or Ma Yun having an accident in the future, and the money will not be withdrawn.