Beijing, China – China’s financial institution disclosed on Sunday it had asked the country’s payments giant Ant Group Co Ltd to shake up its lending. Together with other consumer finance operations, the most recent blow to its billionaire founder and controlling shareholder Jack Ma.
The announcement came quite a month after Chinese regulators abruptly suspended Ant’s blockbuster $37 billion initial public offering in Shanghai and city, and only days after the country’s antitrust authorities said they’d launched a probe into Ma’s e-commerce conglomerate Alibaba Group Holding Ltd.
Bid to slow the Ant’s growth
Chinese regulators and Communist Party officials have set about reining in Ma’s sprawling financial empire after he publicly criticized the country’s regulatory system in October for stifling innovation.
Regulators have urged Ant to rectify financial regulatory violations, including in its credit, insurance and wealth management businesses, and overhaul its credit rating business to guard personal information, People’s Bank of China (PBOC) Vice Governor Pan Gongsheng said on Sunday.
Pan’s comments stopped wanting calling for a breakup of Ant, yet pointed to a big operational restructuring. Ant should founded a separate company to make sure capital adequacy and regulatory compliance, Pan said.
There should be full license for ant to work its personal credit business. And also be more transparent about its third-party payment transactions and not engage in unfair competition, Pan added.
Changing up the pace
Ant said during a statement it might establish a “rectification” working group and fully implement regulatory requirements.
Ant Group says it’ll establish unit to fulfill China regulator demands
The Chinese government advised Ma to remain within the country, Bloomberg News has reported, citing an individual accustomed to the matter. Nobody could reach Ma for comment.
Pan said Ant representatives met on Saturday with officials from the PBOC and other Chinese banking, securities and exchange regulators.
During the meeting, regulators observed Ant’s issues. Including its poor corporate governance, defiance of regulatory demands, illegal regulatory arbitrage, the utilization of its market advantage to squeeze out competitors, and harming consumers’ legal interests, consistent with Pan.
The launching of Ant was in 2004 and Alibaba owns 33% of it. Its Alipay app dominates digital payments in China, with more than 730 million monthly users. The Hangzhou-based company also built an empire connecting China’s borrowers and lenders, securing short-term loans within minutes. It had been poised to be valued at over $300 billion in its stock market debut.
Last month, China issued draft rules aimed toward preventing monopolistic behavior by internet firms. Therefore, the Politburo this month vowed to strengthen anti-monopoly efforts in 2021 and rein in “disorderly capital expansion.”
China also warned internet giants this month to brace for increased scrutiny. This is because it slapped fines and announced probes into mergers involving Alibaba and Tencent Holdings Ltd.
More information about:
- China launches probe into Alibaba for suspected monopolistic behavior
- China’s industrial profits grow vigorously, seventh straight rise