Ride-hailing app Ola has modified some of the regulatory terms that define its operations in a move that grants greater control to the company’s founders while curtailing the influence of investors, including its biggest stakeholder, Japan’s telecom and Internet conglomerate SoftBank Corp.
The set of changes to the articles of association — a document that specifies the regulations for a company’s operations — was made by ANI Technologies Private Ltd, which owns and operates Ola, after the company raised additional capital from SoftBank at the end of 2016. According to the amended terms, SoftBank and its affiliates need the approval of Ola’s founders — Bhavish Aggarwal and Ankit Bhati — as well as the consent of the company’s board to purchase any additional shares of the company from other stakeholders.
SoftBank will own over 30% stake in Ola after the last financing round, which also marked a dip in valuation for the seven-year-old company to $3 billion from a high of $5 billion.
“The measures are aimed at giving the founders more power, even as they continue to dilute their shareholding to (access more capital) and take on Uber,” said a banker who tracks the company closely.