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The Chinese central bank has asked investor Jack Ma’s Ant Group company to refocus on its original core business.
The finance company will “clean up” its business with loans, insurance and asset management, as it was called in a statement from the central bank (People’s Bank of China) on Sunday. Instead, Ant should return to its roots as a provider of payment service providers.
The central bank did not order the dissolution of the group, in which retail giant Alibaba has a one-third stake. Instead, he said it was “necessary for the Ant Group to understand” that the agreement needed to be “revised” as soon as possible. At the instigation of the central bank, the group must now create an independent financial holding company with sufficient capital. The regulator also accused Grupo Ant of having too great market power, damaging competition and harming the interests of hundreds of millions of consumers.
The Ant Group actually wanted to go public. However, in early November, the initial public offering (IPO) was canceled on short notice. The reason was the new plans for restrictions on online loans that are likely to have a severe impact on Ant Group’s business. In accordance with this, these companies must finance 30 percent of the loans granted jointly with the banks. However, experts also saw it as a possible step against a company that, in the eyes of the government, may have become too big for the state.
In late November, the Bloomberg news agency, citing people familiar with the matter, reported that the chances of an IPO in the next year were getting smaller and smaller. The reason given was the new guidelines for consumer loans. Postponing the IPO in Shanghai and Beijing would be a further setback for Alibaba founder Jack Ma and early-stage investors like Warburg Pincus, Bloomberg reported at the time. Originally, the IPO was supposed to bring US $ 34.5 billion (€ 28.8 billion) to the coffers and shadow Saudi Aramco’s largest initial public offering to date at $ 29 billion.
In pre-market trading, Alibaba’s stock traded on the New York Stock Exchange temporarily lost 0.45 percent to $ 221.
/ nas
PEKING (international awp)
