SHANGHAI: Tencent Holdings Ltd plans to distribute more than US$16bil (RM67.33bil) of JD.com Inc shares as a one-time dividend, representing a near-retreat from the Chinese e-commerce firm that is stoking concerns it will pull away from other marquee investments.

       The surprise move to divest most of its stake in China’s No. 2 online retailer comes as Beijing punishes the country’s tech giants for monopolistic behaviour, including maintaining closed ecosystems that favour certain companies at the expense of others.

       Tencent’s handout may buy goodwill with the government, which has pushed for the dismantling of barriers and for tech firms to share the wealth. As part of the deal, Tencent president Martin Lau will exit JD.com’s board effective yesterday.

       Shares of JD.com dropped as much as 11% in early Hong Kong trading yesterday, while other Tencent investees Meituan, Kuaishou Technology and Bilibili Inc also declined at least 3%. Tencent’s stock jumped more than 3%.

       “The divestment shouldn’t come as a complete surprise and could be read as a reaction to anti-monopoly investigations – it’s pretty clear that regulators don’t want to see too much ‘faction-like’ patterns in big tech,” said Chen Da, executive director at HHSC Assets (HK).

       “It’s likely that it will be read as the start of breaking up the huddle a bit.”

       Tencent plans to give out 457.3 million Class A shares in JD.com, representing about 86.4% of its total stake and nearly 15% of the online retailer’s total issued shares, according to a filing to the Hong Kong stock exchange.

       At Wednesday’s close, the shares in the proposed distribution were worth HK$127.7bil (US$16.4bil or RM68.87bil).

       Tencent, which controls about 17% of JD.com, will hold roughly 2.3% of the e-commerce company’s shares after the handout, JD.com said in a separate statement.

       The special dividend would rank among the largest shareholder giveaways ever by a Chinese tech company, which have long relied on rapid growth and investment to satisfy investors.

       Tencent’s strategy is to invest in companies during their development stage and to exit the investments as they become capable of financing future initiatives on their own, the Internet giant said.

       “The board believes that JD.com has now reached such a status, and the board therefore considers that it is an appropriate time to transfer” the majority of the shares to its investors, the company said.

       The proposed dividend comes after Chinese tech shares have been battered by more than a year of intense regulatory scrutiny.

       The crackdown, which has spanned antitrust to after-school education, gaming and online content, has slowed growth at Internet firms from Tencent to Meituan and fierce rival Alibaba Group Holding Ltd, forcing the companies to invest heavily in new earnings drivers.

       Xi Jinping’s call to achieve “common prosperity” and level income inequality has also prompted the firms and the moguls behind them to make public pledges to philanthropic efforts.

       Tencent has already announced it is setting aside US$15.7bil (RM66.05bil) for social responsibility programmes.

       The two firms will continue to maintain their “mutually beneficial business relationship, including via their ongoing strategic partnership,” Tencent said.

       Having Tencent as its major shareholder gave JD.com access to the Internet giant’s vast ecosystem, including the super app WeChat that the majority of Chinese consumers use for messaging, paying bills and making purchases. — Bloomberg