Chinese tech billionaire Richard Liu gives up front office roles and direct ownership at JD, but is he still in control?

One of China’s most prominent tech tycoons is relinquishing direct ownership and executive roles in various entities under the business empire he founded nearly a quarter-century ago, prompting speculation about his next steps following the abrupt end of a protracted legal battle in the US. Questions are being raised about Blame.

Richard Liu Qiangdong, the billionaire founder of and the world’s 155th-richest person with an estimated net worth of US$10.8 billion, has sold his 45 percent stake in each of four entities owned by the company’s logistics, health care and investment subsidiaries. has surrendered. September, recent corporate filings showed.

According to the filing, the equity was transferred to Miao Qin, vice president and head of JD’s life and services business division, for “administrative efficiency purposes” because Liu, a non-executive director, was no longer involved in day-to-day operations. . JD’s daytime operations, which made it difficult to arrange the signing of corporate documents.

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Liu, 49, handed his CEO role to longtime confidant and company veteran Xu Lei in April, one of the entrepreneur’s most high-profile moves to remove himself from the daily grind at JD.

“Liu is mostly abroad these days and his absence in China can make administrative trivia, such as document signing, a hassle,” said Li Chengdong, founder and chief analyst at Beijing-based tech consultancy Dolphin. , Can run smoothly without Liu’s constant presence.

JD did not respond to a request for comment on this article.

Liu was last seen in public last month, when a photo surfaced online showing him with his pregnant wife. zhang zetian, at a supermarket in Minneapolis, Minnesota. There was a courtroom ready for a hearing a civil rape case A case was filed against him by a Chinese student in 2019, but settled Just before the trial began, Liu was relieved of the need to testify.

Liu later began to leave corporate and honorary roles. rape allegation First exposed in 2018, Liu was briefly taken into custody by law enforcement in Minneapolis. While he was never charged with criminal offenses and eventually returned to China, he gave up his membership in the Chinese People’s Political Consultative Conference, a top political honor for any private entrepreneur in China.

Richard Liu (second from left) with his wife, Zhang Zetian, in an undated photo. Photo: Handout alt=Richard Liu (second from left) in an undated photo with his wife, Zhang Zetian. Photo: Handout>

In September 2021, Liu stepped down as JD’s president, with Xu taking on the role of leading “the day-to-day operations and collaborative development of various business units”. At the time, JD said that Liu would devote more time to “framing the company’s long-term strategies.”

Some analysts said Liu is following in the footsteps of many Big Tech founders who have stepped aside amid China’s regulatory crackdown on the industry but retained control through indirect means.

Zhang Yiming, founder of ByteDance, owner of TikTok remains very influential Despite handing over its CEO and board seat to his university roommate Liang Rubo last summer, the Post reported in November last year on strategic decisions at the company.

According to Kim Chang-hyun, assistant professor of strategy at Shanghai-based China Europe International Business School, Liu’s recent transfer of equity interests may not result in the loss of his controlling rights over JD.

Xu Lei (third from left),’s then-retail chief executive, plays a bell to mark the company’s listing on the Hong Kong Stock Market at’s headquarters in Beijing in June 2020. Photo: AFP alt=Xu Lei (third from left),’s then-retail chief executive, plays an hour to mark the company’s listing on the Hong Kong stock exchange at’s headquarters in Beijing in June 2020 . Photo: AFP>

JD is listed on both the Nasdaq and the Hong Kong Stock Exchange under a dual-class share structure, an arrangement favored by the tech founders so that they exert effective control over the company by holding only a special class of shares with superior voting rights. Can do

“This is a common strategy often seen among group founders,” Kim said.

When JD applied for a dual primary listing on the Hong Kong stock exchange in June 2020, its prospectus showed that despite holding just 14 percent stake in the company, Liu had 78 percent of total voting rights.

In the same year, Liu stepped down from executive roles at about 230 companies under his vast empire, and stepped away from another 18 in 2021, according to business data service Tianchacha.

In the first half of this year, Liu redeemed 6.6 billion yuan (US$930 million) by selling his personal stake in JD Health and US depository shares held personally through a vehicle called Max Smart.

A worker sorts packages for delivery at a warehouse in Beijing in September. Photo: AFP alt=A worker sorts packages for delivery at a warehouse in Beijing in September. Photo: AFP>

Today, Liu retains executive roles in 33 companies, compared to the 333 executive roles he once held. As of the end of March this year, however, Liu still has 76 per cent of the total voting power in the JD, just two percentage points less than two years ago.

Meanwhile, other JD executives, including CEO Xu, own less than 1 percent of the total ordinary shares, making it nearly impossible for anyone to challenge Liu’s business decisions.

The idea that Liu still has a tight grip on JD is echoed by a former employee who remains close to the company and said that internally, there are talks about Liu’s return to management.

However, outside the company, Liu’s successor Xu has become the new face of the Jedi.

The CEO attended last week’s World Internet Conference, China’s annual showcase of his model of Internet governance, where he gave a speech Describing JD’s role as a “real economy enterprise” and the company’s powerful supply chain, he said it is able to deliver parcels to 94 percent of Chinese counties within 48 hours of placing an order.

This article originally appeared in South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please visit scmp app or go to scmp Facebook And Twitter Page. Copyright © 2022 South China Morning Post Publishers Limited. All rights reserved.

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