Chinese regulators asked Ant Group Co (螞蟻集團) to become a financial holding company that could be regulated more like a bank, offering the first significant guidance on how the financial technology company should overhaul operations after halting its record initial public offering (IPO).
The central bank told Ant Group to rectify unfair competition in its payments business and also end information monopoly, a government statement said.
It also asked the company to cut the outstanding value of its money-market fund Yu’ebao (餘額寶).
Photo: Reuters
The overhaul of Ant Group marks a milestone for regulators, creating a definitive supervision framework for the biggest player in the country’s sprawling fintech sector. The government shocked markets in November last year by suspending billionaire Jack Ma’s (馬雲) record IPO of Ant, citing a changed regulatory environment, days before its trading debut.
The Hangzhou-based company was told to rectify its lending, insurance and wealth management services, and set up a financial holding company, the central bank said in December last year. That means higher capital requirements and greater oversight.
The recast is a step toward meeting the demands of China’s watchdogs, who have pledged this year to curb the “reckless” push of technology firms into finance and are examining monopolies online.
There is little clarity over how investors will judge the firm, which fetched a US$280 billion pre-money valuation before its IPO was halted.
Regulators this month imposed a record US$2.78 billion antitrust fine on Ant’s affiliate Alibaba Group Holding Ltd (阿里巴巴), lifting a cloud of uncertainty hanging over billionaire Ma’s e-commerce empire.
Shares in Alibaba climbed more than 6 percent in Hong Kong yesterday as the e-commerce titan reassured investors that the record antitrust fine would have little impact on its operations.
In a conference call to investors, Alibaba’s board put a positive spin on the regulatory blow saying it appeared to be the end of the investigation, with chairman Daniel Zhang (張勇) saying the fine would not have a “negative impact” on business operations.
Additional reporting by AFP
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