Tencent Gives Away $16B Of its Stake In JD.com To Please Beijing

Tencent is dramatically cutting its stake in JD.com, China's second-largest e-commerce company, as it seeks to stay on the right side of Beijing, which has been cracking down on tech giants to rein in their growing power and influence, Laura He reported for CNN Business.

Photo Insert: The interior of the Tencent headquarters

Tencent plans to distribute more than $16 billion worth of its stake in JD.com (JD) to its shareholders as a one-time dividend, the Chinese gaming and social media giant said Thursday in a stock exchange filing.

The 457 million shares that Tencent plans to give out represent 86.4% of its stake at JD.com, or 14.7% of JD.com's total issued shares.

Currently, Tencent controls 17% of JD.com. After the distribution, its stake will drop to to 2.3%, which means it will no longer be JD.com's largest shareholder.

JD.com founder Richard Liu Qiangdong, who holds 13.9% of shares, will become the biggest stakeholder, according to the company's latest annual report. Walmart follows, with a 9.3% stake.

This surprising retreat by Tencent comes at a time when the country's internet giants are under intense pressure from Beijing.

For the past year, China has increased scrutiny of the tech industry, published detailed rules aimed at tackling unfair competition, slapped companies with massive fines, and demanded that some firms completely overhaul their businesses.

In its filing on Thursday, Tencent said that JD.com has reached a status where it can finance its own growth. It is, therefore, "an appropriate time" to transfer the majority of the stake to its shareholders, Tencent said.

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