The Chinese tech giant Alibaba have recently shocked the technology and business industry following the announcement of its founder and executive chairman Jack Ma. Mr. Ma recently announced that he is reducing his control over Alibaba's licenses which are vital in running some of the company's core businesses. What is even more shocking was Mr. Ma's announcement that he is stepping down from his post next year.
In September, the Chinese tech giant said that Mr. Ma will retire from his post in September 2019. He will be succeeded by Chief Executive Officer Daniel Zhang. Although Mr. Ma will leave his post, he will still retain his status as a permanent member of the Alibaba Partnership which is currently composed of 36 members. These members hold major leadership roles which cover all of Alibaba's different business units.
Two months before he announced his retirement plan, Mr. Ma started to reduce his corporate responsibilities. Most significant of these moves was his decision to reduce his control over the company's Variable-Interest Entities. In this particular business sector, Mr. Ma has a controlling interest which is not based on any majority voting rights based on a regulatory filing dated July 27. It is important to note that these Variable-Interest Entities control Alibaba's licenses to operate a website within China.
According to many observers, Mr. Ma's decision to secede some of its corporate responsibilities once he retires poses a positive sign, especially for Alibaba investors. This is because many Alibaba investors usually want Variable-Interest Entities to be in the hand of a top executive whose corporate interests align with that of the corporation.
Jefferies analysts Karen Chan said that with Mr. Ma's reduced role in Alibaba's corporate undertakings will indicate a lower a "key-man risk" as the company slowly transitions to a different corporate outlook.
Last month during Alibaba's annual investor conference held in Hangzhou, Mr. Ma said that his decision to retire did not come as a surprise. He added that his crucial decision to retire has been floated around for more than 10 years and that he has been totally prepared for it.
In a statement acquired by financial blog Chinese Sina, Mr. Ma said that Alibaba will last for 102 years and that no one person can hold the post of Chief Executive Officer within that same time period.
In terms of its market performance this year, market data have revealed that Alibaba shares were down by as much as 9 percent.
