Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Chinese regulators have imposed a number of requirements Ant Group Co., including the fact that the company returned to its origins as a payment service provider and reformed its lending, insurance and wealth management services, after convening the fintech giant on Saturday.
Ant must be aware of the severity and need to restructure its business and draw up a plan and timeline as soon as possible, the People’s Bank of China said in a statement on Sunday. The Hangzhou-based company must also set up a financial holding company to ensure sufficient capital and compliance in related transactions, while protecting the confidentiality of personal data in its credit rating services, he said.
Authorities also dismissed Ant for what he said is poor corporate governance, contempt for regulatory compliance requirements and engaging in regulatory arbitrage. PBOC said Ant used its dominance to exclude rivals, affecting consumer interests.
China on Thursday launched an investigation into alleged monopolistic practices at Alibaba Group Holding Ltd. and convened an Ant affiliate for a high-level meeting on financial regulations, stepping up control over the twin pillars of billionaire Jack Ma’s Internet domain. The pressure on Ma is essential for a wider effort to reduce an increasingly influential internet sphere.
Once hailed as the engines of economic prosperity and symbols of the country’s technological prowess, the empires built by Ma, The president of Tencent Holdings Ltd., “Pony” Ma Huateng, and other tycoons are now under control after gathering hundreds of millions of users and gaining influence over almost every aspect of daily life in China.
Ma’s own empire is in crisis mode. In early December, with Ant under regular control, the man most closely identified with China Inc.’s meteoric rise. was advised by the government to stay in the country, said a person familiar with the matter. Alibaba itself dumped more than $ 100 billion in market value in November, when regulators torpedoed what would have been a record $ 35 billion debut for Ant.
Its top directors are part of a working group that already has almost daily interactions with guard dogs. Meanwhile, regulators, including China’s Banking and Insurance Regulatory Commission, are weighing on companies that Ant should relinquish control to contain the risks to the economy, officials with knowledge of the issue said. They have not decided whether to cut their various lines of operation, share their services online and offline or follow a completely different path.
Read more: Jack Ma becomes calm after the spectacular outcome of Ant Group
– With the assistance of John Liu, Jessica Sui and Jun Luo
(Updates with more details in the second paragraph.)