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Alibaba announces surprise departure of ex-CEO / Photo: © AFP
NYSE - LSE
Alibaba announces surprise departure of ex-CEO
Chinese e-commerce giant Alibaba has announced the surprise departure of former CEO Daniel Zhang, who had been set Monday to take charge of a key subsidiary as the firm undergoes a major restructuring.
Hangzhou-based Alibaba is one of China's most prominent technology firms, with business operations spanning cloud computing, e-commerce, logistics, media and entertainment, and artificial intelligence.
After years of turbulence in the Chinese tech sector, Alibaba in March announced the biggest restructuring in its history, dividing itself into six entities, with the goal of listing them on the stock exchange separately.
CEO Daniel Zhang was due to take charge of the firm's new cloud computing branch, now a separate entity, on Monday.
But two months after announcing his appointment, Alibaba said its now ex-boss was no longer with the company.
"The board of our Company expresses its deepest appreciation to Mr Zhang for his contributions to Alibaba Group over the past 16 years," the company said in a statement to the Hong Kong Stock Exchange, where it is listed, late on Sunday.
It gave no reason for his departure.
Plans for a spin-off cloud computing firm would go ahead, Alibaba said, "under a separate management team to be appointed".
The company announced in June that Zhang would be replaced by Joseph Tsai as chairman and Eddie Wu as CEO.
The executive played a vital role in the company's success in the past decade, spearheading the now hugely popular Singles' Day shopping festival since its first edition in 2009.
Shares in the firm sank nearly 3.5 percent Monday -- the first working day of its new reorganisation into six distinct branches.
In addition to e-commerce and cloud computing, Alibaba's reach stretches into everything from logistics to media, entertainment and artificial intelligence.
But its vast size brought it into the crosshairs of Chinese regulators as Beijing sought to crack down on the tech sector.
In 2020, Alibaba became the country's first tech giant to bear the brunt of increased oversight, when authorities called off what would have become one of the most valuable public listings in history -- valued at $34 billion -- for its former subsidiary Ant Group.
Ant Group is the owner of Alipay, a mobile payment application widely used in China.
One month after officials hit the brakes on its IPO, Alibaba was investigated for alleged anti-competitive practices, then issued a $2.8 billion fine.
And in July authorities fined Ant Group nearly $1 billion for breaching banking regulations.
S. Sokolow--BTZ
