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BEIJING (AP) – China’s central bank revealed Sunday that it had asked the country’s payments giant Ant Group Co Ltd to reorganize its lending and other consumer finance operations, the latest blow to its billionaire founder. and controlling shareholder Jack Ma.
The announcement came more than a month after Chinese regulators abruptly suspended Ant’s successful $ 37 billion initial public offering in Shanghai and Hong Kong, and just days after the country’s antitrust authorities said they had initiated. an investigation into Ma’s e-commerce conglomerate Alibaba Group Holding Ltd.
Chinese regulators and Communist Party officials have set out to control 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 violations of financial regulations, including in its credit, insurance and wealth management businesses, and to review its credit rating business to protect personal information, the deputy governor of Banco Popular de China (PBOC), Pan Gongsheng.
Pan’s comments fell short of calling for Ant to be disbanded but pointed to a significant operational restructuring. Ant should establish an independent holding company to ensure capital adequacy and regulatory compliance, Pan said.
Ant must also have a full license to operate its personal credit business, be more transparent about its third-party payment transactions, and not engage in unfair competition, Pan added.
Ant said in a statement that it would establish a “rectification” working group and fully implement the regulatory requirements.
The Chinese government advised Ma to stay in the country, Bloomberg News reported, citing a person familiar with the matter. Ma could not be reached for comment.
Pan said Ant representatives met with officials from the People’s Bank of China and other Chinese banking, securities and currency regulators on Saturday.
During the meeting, regulators pointed to Ant’s problems, including its poor corporate governance, defying regulatory lawsuits, arbitrary illegal regulation, using its market advantage to squeeze out competitors and hurting consumers’ legal interests. , according to Pan.
Ant was launched in 2004 and is 33% owned by Alibaba. Its Alipay app dominates digital payments in China, with more than 730 million monthly users. The Hangzhou-based company also built an empire connecting borrowers and lenders from China, obtaining short-term loans in minutes. It was about to be valued at more than $ 300 billion on its debut on the stock market.
Last month, China issued draft rules aimed at preventing monopoly behavior by Internet companies, and the Politburo this month promised to strengthen antitrust efforts in 2021 and curb “disorderly expansion of capital.”
China also warned internet giants this month to prepare for increased scrutiny, as it imposed fines and announced merger investigations involving Alibaba and Tencent Holdings Ltd.
– Reuters
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