China’s Ant Group Chief Executive Officer Simon Hu has unexpectedly resigned amid a regulatory-driven overhaul of the financial technology giant’s business, the first top management exit since a scuppered $37 billion initial public offering (IPO).
Hu, who was named Chief Executive of the Alibaba Group Holding affiliate in 2019, will be replaced by company veteran and Executive Chairman Eric Jing, Ant said in a statement.
Hu’s exit from the company comes as Ant is working on plans to shift to a financial holding company structure following intense regulatory pressure to subject it to rules and capital requirements similar to those for banks.
That pressure abruptly scuttled Ant’s IPO last year, which would have been the world’s biggest.
Hu resigned for personal reasons, Ant said in a statement, without elaborating.
“Following the board’s thorough discussions, we have decided to respect Simon’s personal request and support him fully in his new mission,” Jing said in an internal memo, an excerpt of which was seen by Reuters.
Jing will continue in his current role as chairman, he said. US-listed shares in billionaire Jack Ma’s Alibaba dropped as much as 3.9% in morning trade on Friday.
Hu’s departure is the first major management change since the IPO was scrapped. He was one of the key executives responsible for managing the company’s mega dual-listing in Hong Kong and Shanghai.
Ma’s business empire has been at the centre of a crackdown following an October 24 speech in which he blasted China’s regulatory system. Ant’s financial holding structure is expected to weigh on its valuation, as the fintech firm was valued as a technology firm in its previous fundraising rounds. Typically, valuations are much higher on technology firms than on financial companies.
Published in The Express Tribune, March 15th, 2021.
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