Beijing is trying to shrink Jack Ma’s technological and financial empire and possibly take a bigger stake in its business, according to Chinese officials and government advisers familiar with the matter, as regulators approach the billionaire in a campaign to strengthen the supervision of a technological sphere.
According to a restructuring roadmap set by China’s financial regulators this week, financial technology giant Ant Group Co. will return to its roots as an online payment provider similar to PayPal Holdings Inc., while its more profitable investment and lending businesses would be restricted.
The regulators, led by the central bank, also ordered Ant to form a separate financial holding company, subject to the type of capital requirements applied to banks. This could open a door for large state-owned banks or other types of government-controlled entities to buy into the firm to help strengthen the capital base, officials and advisers say.
China’s National Pension Fund, China Development Bank and China International Capital Corp., the country’s top state-owned investment bank, are already investors in Ant.
Mr. Ma, the richest person in China, helped define China’s new economy with the two companies he founded – Ant and its e-commerce subsidiary Alibaba Group Holding Ltd. Their business covers payment services, sales with online retail, cloud computing, wealth management and loans. Separately, Alibaba is facing an antitrust investigation that could also lead to a review of the divestment of its assets and assets.