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September 10, 2018

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Ma to announce succession plan for Alibaba, retirement report denied

Source: Agencies | 00:01 UTC+8 September 10, 2018 | Print Edition

ALIBABA Group Holding Ltd’s billionaire co-founder Jack Ma will announce a succession plan today to hand the reins of his sprawling empire to a new generation of leaders but will remain executive chairman for the time being.

Ma will announce the plan on his 54th birthday and the handover strategy will stretch over a significant period of time, the South China Morning Post newspaper reported, citing a company spokesman.

Alibaba declined to comment but pointed toward the SCMP story when asked about Ma’s plans.

Ma, who co-founded Alibaba in 1999, stepped down as chief executive in 2013. He currently serves as the company’s international face at top political and business events.

The New York Times reported on Friday that Ma would retire from the e-commerce company today as the former English teacher seeks to focus on philanthropy in education.

China’s third-richest person with a net worth of US$36.6 billion according to Forbes magazine, Ma was quoted by the New York Times as saying his retirement was not the end of an era, but the beginning of one.

But the Alibaba spokesman told the SCMP that the New York Times’ story “was taken out of context, and factually wrong.”

The paper, which is owned by Alibaba, added that today’s succession strategy was part of a plan “for grooming a generation of younger executives to take over the reins” of the company.

The SCMP report ran quotes from Ma himself, but they did not address when exactly he would retire.

Ma said he met with company executives 10 years ago to work out “what Alibaba would do without me.”

“Anybody who knows me knows I embrace the future. This is not about retiring, stepping away, or backing off. This is a systematic plan,” the paper quoted Ma as saying.

The SCMP said Ma would be in Russia this week for Alibaba business meetings as well as an upcoming trip to South Africa and a planned speech at the company’s investor day in mid-September.

Eileen Murphy, a spokesperson for the New York Times, said the newspaper stood by its story.

While Ma’s plan to gradually step back is a milestone, analysts and industry professionals said it was unlikely his involvement would change significantly.

“I don’t think it means that much, frankly. He stepped back from the CEO role about four or five years ago and very specifically made a comment about wanting the younger people to lead the company,” said Kevin Carter, founder of The Emerging Markets Internet exchange-trade fund.

The New York Times’ report surprised many in the global business community because of Ma’s comparative youth, especially in China, where it is not unusual for tycoons to remain in place into their 80s.

In an interview with Bloomberg TV released on Friday, Ma hinted at his retirement plans, saying he wanted to follow in the footsteps of Microsoft founder Bill Gates, one of the world’s most prolific philanthropists.

“There’s a lot of things I can learn from Bill Gates. I can never be as rich, but one thing I can do better is to retire earlier,” he said.

Ma oversees a number of charitable projects in education and environmental fields. He is a cult figure in Internet industry and has attracted a big following among entrepreneurs and in pop culture. At events, he is often met with screaming fans.

Ma maintains a prominent international profile, frequently inviting global leaders to the company’s Hangzhou headquarters. Last year, he met US President Donald Trump, who described him as “smart” and “open minded.”

Alibaba was founded by 18 people led by Ma. China’s biggest e-commerce firm, it now has more than 66,000 full-time employees, the company’s latest annual filing showed.

The company had a market value of about US$420 billion as of Friday. Ma also controls Ant Financial, which was valued at about US$150 billion after a recent fundraising round.

The succession plans come at a tricky time for Chinese tech firms. Authorities have increasingly sought to regulate the industry where Alibaba and main rival Tencent Holdings Ltd are battling for consumers.

Trade tensions also present a new challenge for Chinese tech firms, especially those like Alibaba which are rapidly expanding overseas.

This year, regulators shot down a US$1.2 billion bid for money transfer service MoneyGram International Inc by Ant Financial on national security grounds, which the company said was related to “geopolitical” changes.

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