24/07/2023 (China) - Alibaba Group Holding decided to retain its stake in Ant Group and declined to participate in the share buy-back plan proposed by the fintech giant. In a statement to the Hong Kong stock exchange, Alibaba emphasized the strategic importance of Ant Group to its various businesses and maintained its shareholding.
Ant Group, which faced nearly three years of regulatory scrutiny since its unsuccessful US$37 billion stock sale in November 2020, recently received a 7.123 billion yuan (US$984.33 million) fine from the People's Bank of China. However, the company appears to be moving forward and held a shareholders meeting to approve a plan to repurchase up to 7.6 per cent of its equity interest from investors. The repurchased shares would be allocated to Ant's employee incentive plans.
With a 33 per cent interest in Ant Group, Alibaba demonstrated confidence in the company's future and aimed to encourage other investors to take a long-term view. Despite a significant drop in valuation, Alibaba believed that Ant Group would seek to list again in the future. The company's commitment to regulatory compliance and China's government support for privately-owned enterprises encouraged shareholders to stand behind Ant Group.
The decision by Alibaba not to sell any shares and maintain its stake in Ant Group signifies its support for the company's growth and transformation after facing regulatory challenges. Ant Group had undertaken various reforms following the suspended IPO, including returning to its origins in online payments and adhering to regulatory guidelines. These efforts reflected the company's optimism about the future and its determination to succeed once again.