The Chinese digital payments company Ant Group, an affiliate of Alibaba Group (NYSE: BABA), has announced the resignation of CEO Simon Hu.
What Happened: Hu served as chief executive since December 2019 and was Ant Group’s president from November 2018 to December 2019. He was previously president of Alibaba Cloud from November 2014 to November 2018.
The company announced that Hu was stepping down “due to personal reasons,” but offered no further details.
Executive Chairman Eric Jing, who preceded Hu as chief executive, will return to that role while retaining his current position.
Why It Happened: The Chinese government has been applying increased regulatory oversight on Ant Group and its parent company.
In November, Ant Group’s planned $37-billion initial public offering was canceled two days before it was scheduled to be listed on the Hong Kong and Shanghai exchanges. The offering would have been the largest in history had it gone through.
China’s central bank and securities regulators have also targeted Ant’s lending, wealth management and insurance services, forcing the company to stick to its traditional service of facilitating payments.
Ant evolved from Alibaba’s e-commerce operations and its popular Alipay service.
Alibaba, which owns one-third of Ant Group, became the subject of an antitrust investigation by Chinese regulators since December and the company’s leader, Jack Ma, has mostly disappeared from public view while his companies have been under investigation. This prompted speculation that Ma had been arrested by the Chinese authorities, but Bloomberg reported sightings of Ma during a 50-second livestreamed appearance in a video chat with rural teachers in January and a February visit to at a golf resort on the Chinese island of Hainan.
BABA Price Action: Alibaba shares were down 3.83% at $231.67 at last check Friday.
Photo of Simon Hu courtesy of Ant Group.
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