The shock suspension of the Ant Group Co (螞蟻集團) US$35 billion initial public offering (IPO) is just the beginning of a renewed campaign by China to rein in the fintech empire controlled by Jack Ma (馬雲).
Authorities are now setting their sights on Ant’s biggest source of revenue: its credit platforms that funnel loans from banks and other financial institutions to millions of consumers across China, people familiar with the matter said.
The China Banking and Insurance Regulatory Commission (CBIRC) plans to discourage lenders from using Ant’s platforms and has already asked some to ensure their portfolios are compliant with stringent draft regulations announced on Monday, said the people, who asked not to be identified as they were discussing private information.
Photo: AFP
The proposed measures, which call for platform operators to provide at least 30 percent of the funding for loans, would render many of Ant’s existing transactions non-compliant. The company currently keeps about 2 percent of loans on its own balance sheet, with the rest funded by third parties, or packaged as securities and sold on.
The full scope of China’s plans for Ant is unclear and it is possible that lenders could continue to work with the company once it complies with regulators’ requests.
Any suggestion that banks would stop using its platforms is “unsubstantiated,” Ant said in a response to questions from Bloomberg.
“Ant will continue to support bank partners to make independent credit decisions, and leverage Ant’s technology platforms to serve consumers and small businesses,” it said.
The CBIRC did not immediately respond to a request for comment.
“From the perspective of regulators and investors, they all need Ant to provide a better disclosure on the colending business,” said Chen Shujin (陳姝瑾), Hong Kong-based head of China financial research at Jefferies Financial Group Inc (富瑞金融). “Ant needs to be aligned with regulations going forward and show that its business model can help lower borrowing costs for the economy rather than raising them with some kind of monopoly.”
China halted Ant’s IPO on Tuesday after summoning Ma to a meeting on Monday to outline an array of concerns and new regulations.
The Chinese government is tightening its controls on Ant and other fast-growing financial firms after years of allowing them to operate without the capital and leverage requirements imposed on banks.
Authorities have not yet provided much detail about what prompted the turnabout on the IPO, beyond saying that it could not go ahead because of a “significant change” in the regulatory environment.
The halt came after Ma criticized the nation’s financial system and questioned global regulatory models at a conference last month, calling banks “pawn shops.”
China is still a “youth” and needs more innovation to build an ecosystem for the healthy development of local industry, Ma said.
SECRET OUT: Minister of Health and Welfare Chen Shih-chung yesterday accidentally revealed that the infections occurred at the ministry’s Taoyuan General Hospital The Central Epidemic Command Center (CECC) yesterday reported the fifth COVID-19 case in a cluster infection at a Taoyuan hospital, where four other medical workers were confirmed to have been infected over the past week. The latest case is a nurse who had tested negative on Tuesday last week, Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the CECC, told a news conference. However, on Thursday, she developed symptoms, such as nasal congestion and a cough, and a second test yesterday found that she was infected, Chen said. She is the head nurse of a ward where two
VIGILANCE: While two of the cases are family members of a nurse, there is no sign of community spread and the source of infection is identifiable, the CECC said The Central Epidemic Command Center (CECC) yesterday reported four new domestic COVID-19 cases associated with a cluster infection at a Taoyuan hospital. Since the first case was identified on Tuesday last week, five healthcare workers — two doctors and three nurses — at the Ministry of Health and Welfare’s Taoyuan General Hospital have tested positive for the virus. Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center, said that two of the four new cases are the husband and daughter of a nurse (case No. 863) who had earlier been confirmed to have COVID-19. The husband (case No. 864)
PILLARS OF DEMOCRACY: US Ambassador to the UN Kelly Craft posted online after the virtual meeting that Taiwan should be able to share its successes in global venues President Tsai Ing-wen (蔡英文) and US Ambassador to the UN Kelly Craft yesterday held a virtual meeting, during which Tsai described Taiwan as a “force for good” that deserves a place on the world stage, while Craft reaffirmed Washington’s support for Taiwan’s international participation. The virtual talk was held at about 11am, after Craft’s trip to Taiwan was abruptly canceled. She had been scheduled to meet with Tsai in person at the Presidential Office in Taipei yesterday morning as part of a three-day visit to Taiwan. On Tuesday, the US Department of State canceled all of its planned trips, citing a need
‘CONTAINED’: The CECC is not considering locking down the hospital where the infections were detected, as their source has been found, Chen Shih-chung said The Central Epidemic Command Center (CECC) yesterday reported one new domestic COVID-19 case, a doctor at a hospital in northern Taiwan where three other medical workers were confirmed to have the disease over the past week. The new case — No. 856 — is a doctor who had treated a COVID-19 patient together with case No. 838, said Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center. Case No. 838, confirmed as a locally infected COVID-19 case on Tuesday, was the first case in the hospital cluster, and later infected his partner, who is a nurse at the same