(ATF) Simon Hu, chief executive of China's Ant Group, has resigned from his role, according to multiple media reports on March 12, as the financial technology giant is being pushed by regulators to overhaul its business after its failed $37 billion initial public offering in Hong Kong.
Hu, who became chief executive only in 2019, cited personal reasons. The company did not elaborate.
He will be replaced by company veteran and executive chairman Eric Jing, the company said. Nasdaq-listed shares in listed affiliate Alibaba were down 3.75% at the close on Friday. Hong Kong stocks dipped just 0.7%.
Jing will also continue in his current role as chairman, he said in an internal memo seen by Reuters.
According to Chinese media, Jing said the board received and accepted Hu’s request to resign and devote his efforts to philanthropic work at Ant and its largest shareholder Alibaba Group Holding.
Chinese regulators have tightened their grip on fintech companies, amid concerns over systemic financial risks brought by the lending empire affiliated to China's e-commerce giant Alibaba Group .
"Ant’s days as a freewheeling tech firm are over," said Julian Evans-Pritchard, chief economist at Capital Economics.
After years of presenting itself as a tech firm and benefitting from limited oversight, Ant Group has reportedly agreed to restructure as a financial holding company (FHC).
"This is the latest development in a broader crackdown on the tech giants that appears unlikely to end soon," said Evans-Pritchard. "Alibaba’s main competitor, Tencent, will probably receive the FHC treatment at some point too."
In response to the intense regulatory pressure, the group has been reining in some of its operations, taking steps to bring its capital requirements in line with those of banks, and revamping itself into a financial holding firm.
Ant Group flagged a set of financial self-discipline rules on March 12 amid intense scrutiny on its activities by authorities and the country's overall tightening of financial technology regulations.
The rules, the first of their kind released publicly by the financial technology giant, comes some four months after China suspended the group's $37 billion plan for a share listing in both Shanghai and Hong Kong.
In a statement, Ant said its consumer loan platforms should not issue loans to minors, and must prevent small business loans from flowing into stock and property markets.
Hu, Alibaba veteran, joined Alipay, the payments business around which Ant was later built, in 2005.
A former banker, Hu founded AliFinance, one of the predecessor businesses of Ant, and held various senior roles at Alibaba including president of Alibaba Cloud, before taking up the top job at Ant.
With reporting by Agence France-Presse and Reuters