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Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Chinese regulators imposed a series of requirements on Ant Group Co., including the company returning to its roots of being a payment service provider and reforming loan, insurance and wealth management services, after convening the fintech giant on Saturday.
Ant should be aware of the seriousness and need to restructure its businesses and come up with a plan and schedule as soon as possible, the People’s Bank of China said in a statement Sunday. The Hangzhou-based firm also needs to establish a financial holding company to ensure capital adequacy and compliance in connected transactions, while protecting the privacy of personal data in its credit rating services, it said.
Authorities also criticized Ant for what they said was poor corporate governance, disdain for regulatory compliance requirements and participation in regulatory arbitration. The People’s Bank of China said Ant used his dominance to shut out rivals, hurting consumers’ interests.
China on Thursday launched an investigation into alleged monopolistic practices at Alibaba Group Holding Ltd. and convened affiliate Ant for a high-level meeting on financial regulations, intensifying scrutiny on the twin pillars of billionaire Jack Ma’s internet dominance. Pressure on Ma is critical to a broader effort to curb an increasingly influential Internet sphere.
Once hailed as drivers of economic prosperity and symbols of the country’s technological prowess, the empires built by Ma, Tencent Holdings Ltd. chairman “Pony” Ma Huateng and other moguls are now under scrutiny after amassing 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 regulatory scrutiny, the government advised the man most closely identified with the meteoric rise of China Inc. to stay in the country, a person familiar with the matter said. Alibaba itself has lost more than $ 100 billion of market value since November, when regulators torpedoed what would have been Ant’s record $ 35 billion debut.
Its top executives are part of a work group that already has almost daily interactions with watchdogs. Meanwhile, regulators, including the China Banking and Insurance Regulatory Commission, are weighing which companies Ant should cede control to in order to contain the risks it poses to the economy, officials with knowledge of the matter said. They haven’t decided whether to split their different lines of operation, split their online and offline services, or go a completely different path.
Read more: Jack Ma shuts up after Ant Group’s spectacular destruction
– With the help of John Liu, Jessica Sui and Jun Luo
(Updates with more details of the second paragraph.)
