Chinese multinational tech firm Tencent Holdings Ltd. is set to unload $16-billion worth of shares in e-commerce group to shareholders starting March, FT reported.

  • Tencent will start distributing 460 million ordinary shares of in March, reducing its holdings to 2.3% from 17%. The announcement also included the resignation of Tencent President Martin Lau from the board.
  • The development comes after Chinese officials cracked down on the country’s tech firms, with its antitrust regulator repeatedly imposing penalties on Tencent and rival Alibaba for their previous transactions.
  • A source privarte to the matter said the transaction reinforces that the company is not looking to build an empire or expand its influence, and it does not want to be perceived to be exerting massive influence on the economy.
  • Under the deal, shareholders will accept 1 class A ordinary share of for every 21 shares of Tencent they hold. Tencent also opened the possibility of selling shares on the open market.

A source close to Tencent said the transactions were a way for the firm to funnel give money back to shareholders in a tax-free way. TCEHY is down 1.69%, while JC is down 7.80% premarket.