Alipay will not have a majority shareholder with controlling power.
BEIJING – The action enhances corporate governance and contributes to the attainment of sustainable development.
Ant Group, a Chinese fintech business, has completed a process to eliminate all current controllers at its main payment platform, Alipay. This is part of their continuous efforts to improve their corporate governance and promote sustainable development in the long run.
The People’s Bank of China has announced that it has reached an agreement about removing controlling stakeholders from Alipay, a widely used mobile payment service developed by Ant Group.
Liu Dian, a researcher at the China Institute of Fudan University, stated that the central bank’s recognition of the elimination of any dominant shareholder from Alipay demonstrates the regulators’ growing focus on managing risks, implementing anti-monopoly measures, and safeguarding user data on internet finance service platforms.
“As fintech companies expand quickly, regulatory authorities require these businesses to operate in a more open and regulated way,” Liu added. This will assist platforms in managing systemic financial risk, ensuring financial stability, and enhancing the protection of customers’ lawful rights and interests.
“Eliminating any existing controllers can reduce financial risks associated with the dominance of a single controlling shareholder,” stated Bai Wenxi, the chief economist at IPG China.
Bai stated that the decision will strengthen the company’s ability to compete in the market, improve its business organization, and boost its risk management.
“Not having a real controller will make it easier for the company to be more flexible in terms of innovation and expanding its operations. It will also help speed up the process of digital transformation and upgrades and improve the user experience and service quality,” he said.
Ant Group stated in January 2023 that no individual shareholder or group of shareholders will have sole control over the company, as part of its wider effort to enhance corporate governance. The decision implies that Jack Ma, the co-founder of Alibaba, will no longer influence the Chinese financial technology business. This is a result of several modifications that have changed how Ant’s major shareholders exercise their voting rights.
Pan Helin, a co-director of the Digital Economy and Financial Innovation Research Centre at Zhejiang University’s International Business School, stated that eliminating any real controllers from Alipay is beneficial for enhancing the corporate governance system of Ant Group and could potentially facilitate the company’s IPO.
Pan stated that the ownership structure of Ant would become more open and varied, which would guarantee its stable and standardised growth and effectively reduce the operational risk of the platform.
According to Wang Pengbo, a senior analyst at market consultant Botong Analysys, Alipay’s decision to eliminate an actual controller is by the central bank’s regulations for non-bank payment firms. This shift also contributes to the positive growth of the payment sector.
He noted that following the modification to its shareholder voting rights, Ant can promptly adapt its development strategy according to market fluctuations, therefore enhancing the safeguarding of shareholders’ and users’ lawful rights and interests.
Stay Updated about the latest technological developments and reviews by following TechTalk, and connect with us on Twitter, Facebook, Google News, and Instagram. For our newest video content, subscribe to our YouTube channel.
Read More: Pokemon GO 5 Game-Changing Updates for 2024
