Ever since Chinese behemoth Alibaba’s Ant Group filed its initial public offering application last year, the company has been on a rollercoaster of obstacles. The Chinese authorities instantly torpedoed the IPO and cracked down on regulations that would force Jack Ma’s financial technology company Ant to recalibrate its business. In the latest news, Ant Group’s CEO Simon Hu resigned effective immediately earlier in March, casting a shadow on both the company’s IPO listing and its overall standing.
Hu first joined Alibaba in 2005 from his role at the nation’s second-largest lender, China Construction Bank. He then moved from Alibaba to Ant in November 2018 before becoming the financial technology company’s CEO in December 2019. In his time working for billionaire Jack Ma’s companies, Hu was known for rolling out major innovations for the group such as using data analytics to offer collateral-free financing services to small businesses. He also helped Alibaba surpass Amazon.com Inc. in building Asia’s largest cloud business.
It was only shared that Hu’s resignation stemmed from personal reasons. Following the announcement, Hu also stepped down from his role as an executive director on the company’s board. Ant’s existing chairman, Eric Jing, became CEO effective immediately. All of these company developments were shared by an unnamed close source to the matter. Hu will remain with the company only to extend his services toward Ant and Alibaba’s philanthropic and charitable arms moving forward.
Michael Norris, a research and strategy manager at Shanghai-based consultancy AgencyChina believes that Hu’s appointment and departure at Ant were linked closely to the company’s imminent IPO. He shared that Hu’s “leaving casts a cloud on the timeline of the listing.” The $35 billion initial public offering had been ceased immediately in November with authorities claiming a change in the regulatory environment. Since then, the government has issued a host of new rules aimed at stemming the influence of giant financial firms like Ant over digital payments, online lending, and credit scoring.
While it is unclear exactly to what extent Hu’s departure will cost Ant during these challenging times for the company, sources familiar with the matter are predicting that the firm’s valuation could drop to about 50% of its estimated $280 billion. If Hu’s departure will indeed have a severe impact on Ant’s upcoming IPO, the company may have a long road ahead in building back up to its earlier successes.