Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Chinese regulators imposed a series of requirements Ant Group Co., including returning the company to its origins as a payment service provider and reforming lending, insurance and asset management services, after calling the fintech behemoth on Saturday.
Ant must be aware of the seriousness and necessity of restructuring its businesses and come up with a plan and timetable as soon as possible, the People’s Bank of China said in a statement on Sunday. The Hangzhou-based company must also establish a financial holding company to ensure adequate capital and related transaction compliance while protecting the privacy of personal information in its credit scoring services, he said.
Authorities also condemned Ant for what they said as poor corporate governance, disregard for regulators’ compliance requirements, and involved in regulatory arbitrage. The PBOC said Ant was using his dominance to shut out rivals and harm consumer interests.
China opened an investigation into alleged monopolistic practices at Alibaba Group Holding Ltd. on Thursday. and called the branch Ant for a high-level meeting on financial regulation, which escalated the investigation into the two pillars of billionaire Jack Ma’s internet domain. The pressure on Ma is central to a broader effort to curb an increasingly influential Internet sphere.
Once hailed as driving forces 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 tycoons are now under scrutiny after amassing hundreds of millions of users and impacting nearly every aspect of everyday life in China.
Ma’s own empire is in crisis mode. Since early December, when Ant was under regulatory scrutiny, the man most identified with the rapid rise of China Inc. advised by the government to stay in the country, a person familiar with the matter said. Alibaba itself has lost more than $ 100 billion in market value since November, when regulators torpedoed what would have been a record $ 35 billion Ant debut.
His top managers are part of a task force that already has almost daily contact with watchdogs. Meanwhile, regulators, including the China Banking and Insurance Regulatory Commission, are weighing up which companies Ant should give up control in order to contain risks to the economy, officials have said knowingly. They have not yet made a decision on whether to split the different activities, split the online and offline services, or take a completely different path.
Read more: Jack Ma becomes silent after the spectacular demise of Ant Group
– With help from John Liu, Jessica Sui and Jun Luo
(Updates with more details from the second paragraph.)