Yesterday, news broke in the market that Tencent's holdings were drastically reduced by shareholders. On April 8, Tencent officially issued an announcement disclosing the details of the holdings reduction.

According to the announcement, Tencent received notification from Prosus (with Naspers holding the majority of shares and Tencent's controlling shareholder) that its wholly-owned subsidiary, MIH TC, entered into a placement agreement with the placement agent on April 8, 2021. The content relates to the sale of a total of 191,890,000 shares at a total cost of HK$114,174,550,000, accounting for about 2% of the total issued shares.

Immediately prior to the sale, Prosus indirectly held 2,961,223,600 shares, accounting for about 30.86% of the total number of issued shares.

Following the completion of the sale (expected to be implemented on April 12, 2021), Prosus will indirectly hold 2,769,333,600 shares, accounting for about 28.86% of the total number of issued shares, while Naspers, Prosus, and MiH TC will no longer be controlling shareholders of Tencent.

In a press release dated April 7, Prosus announced that no further shares will be sold for at least the next three years. The arrangement is in line with its long-term confidence in Tencent's business potential.

According to the listing rules of the Hong Kong Stock Exchange, a controlling shareholder is: (1) any person or group of persons authorized to exercise or control the exercise of 30% or more of voting rights at the issuer's shareholders' meeting. (2) A person or group of persons capable of controlling most of the members that make up the issuer's board of directors. In other words, if the shareholding ratio falls below 30%, you are no longer the controlling shareholder of the listed company.