“Large state-owned banks, etc. are likely to participate in capital increase”… Stepping through the nationalization procedure
In addition to the dilution of capital increase, Ma Yun’s stake and the possibility of national sale were also observed.
[장현경 제작] Photo synthesis
(Shanghai = Yonhap News) Correspondent Cha Dae-woon = Ant Group, the world’s largest fintech company, completely dominated by Alibaba Group founder Ma Yun, is expected to convert to a financial holding company at the request of the Chinese authorities.
Large-scale capital increase is inevitable for Ant Group to become a financial holding company. In the process, as the stakes are greatly diluted, there is a growing possibility that Ma will lose control.
The Wall Street Journal (WSJ) reported on the 27th (local time) that Ant Group has submitted an outline of its business reform plan to the authorities, citing sources.
Ant Group and the Chinese authorities have not yet made an official stance, and if the related reports are true, Ant Group’s movement to convert to a holding company is expected to accelerate.
Ant Group’s conversion to a holding company is not new because it has been driven by strong demand from Chinese financial authorities.
Financial supervisory institutions such as the People’s Bank summoned Ant Group executives in the form of a’reservation interview’ (wetan·豫談) in December last year and publicly criticized “the consciousness of complying with the law is low”, and the ‘5 major demands’ including establishment of a financial holding company I delivered the details.
The market is paying great attention to the possibility that Ant Group will undergo a major change in its governance structure through large-scale capital increase in the process of converting to a financial holding company.
In December of last year, the Chinese authorities ordered Ant Group to establish a financial holding company, specifically demanding that it maintain’sufficient capital’.
Bloomberg News predicted that “Antgroup will have to raise significant amounts of money to meet the needs of regulators.”
According to an investment guide released by Ant Group in the course of its listing promotion in August last year, Ma-Win is the real ruler of the company, which owns 50.52% of Ant Group in direct and indirect ways.
This figure is a combination of 29.8621% and 20.6556% shares of Junao Investment and Junhan Investment, a corporation established to hold treasury shares for Ant Group employees including Ma Yun.
In addition, since Alibaba, the parent company of Ant Group, holds a 32.6470% stake, Ma Win can actually control more than 80%.
In the midst of this, if Ant Group makes a large-scale capital increase, the stake in Ma’win will naturally decrease and the stake in a third party will increase.
Experts predict that as China’s large state-owned banks and pension funds actively participate in the capital increase, Ma Yun’s influence will weaken and the state’s control will be relatively strong.
An official from a foreign investment agency told Yonhap News, “Even in the world, there are very few cases where an individual holds more than 50% of a large bank. It is an unacceptable level for the company,” he said. “The state-owned companies will try to dilute the stakes in Alibaba, including Ma Yun, by participating in the capital increase.”
He predicts, “The conversion to a holding company will be a solution to lowering Ma’s stake, but it will not end with a capital increase for the conversion of a holding company, and there may be plans for state-owned companies to purchase additional shares of Ant Group held by Ma Win and Alibaba.” did.
As such, if state-owned companies secure a large number of shares through capital increase or acquisition, it could lead to the effect that Ant Group, which used to be a 100% private company, will become nationalized.
In addition, the conversion of Ant Group as a holding company is an indication of the full-scale supervision of financial authorities.
Until now, Ant Group was treated as a fintech (financial technology) company rather than a formal financial company. Under the loose supervision of the authorities, the company built a’financial empire’ by expanding the scope of the business to include micro-loans, fund and insurance sales brokerage, in addition to electronic payments, which are its main business.
Financial holding company regulations released in November of last year require financial holding companies to provide information on shareholders, management, sources and use of funds, risk management, etc. to the authorities.
Bloomberg said, “The conversion of Ant Group as a financial holding company allows the authorities to see all of the company’s activities,” said Bloomberg. “It has completely eliminated the possibility of (Ant Group’s) regulatory evasion.”
The will of the Chinese authorities to weaken the influence of Ant Group, which dominated the core infrastructure of China’s economy, centered on electronic payments, has become stronger.
Earlier, the Chinese financial authorities clearly demanded that the Ant Group effectively withdraw its hands from the brokerage business of selling profitable microcredits and funds and insurance and stick to the’main business’ but low-profit electronic payment business.
However, the People’s Bank didn’t stop there, and last week issued a draft regulation that would force the division of a corporation if one company had a market share of 50% or more and two companies combined with a market share of 75% or more in the electronic payments industry.
Although specific application guidelines have not yet come out, only one of Ant Group’s electronic payment service Alipay (Zfubao) has a market share of more than 50%, so in extreme cases, by order of the authorities, Alipay is split into two or three and is forcibly The possibility of being sold cannot be ruled out.
After Ma Yun’s provocative public criticism at the end of October last year, the listing of Ant Group, which was expected to become the world’s largest, was canceled. After that, the authorities took the lead in various reasons such as antitrust and personal information protection. It is strengthening regulations related to core business.
An official from a foreign investment agency said, “If Ant Group converts to a financial holding company, the authorities can control the capital increase, and thus control the growth of Ant Group as a whole.” It shows that you shouldn’t be against it.
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2021/01/28 11:47 sent