Alibaba Partnership Sees Exit Of Key Ant Executives As Decoupling Of Jack Ma-Founded Companies Continues Amid Regulatory Crackdown

Alibaba Group Holding Limited BABA has reportedly removed all Ant Financial executives from its partnership, signaling its intent to steer clear of regulatory wrath.

What Happened: Seven Ant executives stepped down from the partnership at the end of May, the Wall Street Journal reported, citing information from the Hangzhou-based company’s annual report released Monday. The executives who vacated the partnership included Ant Chairman and CEO Eric Jing and the chief technology officer and chief people officer, the report added.

Hangzhou-based Alibaba had established the partnership in 2010 with the objective of serving as a decision-making body for the Jack Ma-founded company and its affiliates.

The partnership’s membership has now been pruned from 38 to 29.

The exit of top Ant executives followed Alibaba amending the partnership agreement to include only Alibaba employees.

Related Link: Alibaba Surges 3.6% On Primary Hong Kong Listing Plan, Hang Seng Sees Trend-Reversal

Why It’s Important: Alibaba has been under fire since late 2020 when Chinese regulators began cracking down on the company. The scrutiny was so intense that Ant had to shelve its initial public offering plan and Alibaba was slapped with a $2.8 billion fine for anti-competitive activities.

The regulators widened their crackdown in early 2021 to include other high-profile Chinese tech names in a bid to keep them under check. Shares of these companies have lost billions in market capitalization following the development. Additionally, Alibaba’s fundamentals took a hit from economic softness.

Alibaba has been taking remedial actions to steer clear of further regulatory scrutiny. The company said on Tuesday it plans to apply for a primary listing in Hong Kong, capitalizing on a rule change by the Hong Kong exchange to attract high-tech companies.

Price Action: Reacting to the twin developments, Alibaba’s Hong Kong-listed shares closed over 5% higher on Tuesday. U.S.-listed Alibaba ADRs traded traded 3.4% higher at $104.50 in the premarket session, according to Benzinga Pro data.