Exclusive: China to end Ant Group’s regulatory revamp with fine of at least $1.1 bln-sources

exclusive:-china-to-end-ant-group’s-regulatory-revamp-with-fine-of-at-least-$1.1-bln-sources
Exclusive: China to end Ant Group’s regulatory revamp with fine of at least $1.1 bln-sources

Chinese authorities are expected to announce a fine of at least 8 billion yuan ($1.1 billion) on Ant Group, according to sources familiar with the matter. This fine would bring an end to the fintech company’s regulatory overhaul, which has been driven by the People’s Bank of China (PBOC) since Ant’s IPO was cancelled in late 2020. The PBOC is likely to disclose the fine in the coming days. The penalty, one of the largest ever fines for an internet company in China, will allow Ant Group to secure a financial holding company license and revive its plans for a stock market debut.

The fine on Ant Group would also have broader implications for the technology sector in China. It would signify a key step towards the conclusion of China’s regulatory crackdown on private enterprises, which began with the cancellation of Ant’s IPO and has negatively impacted the market value of several companies. The sources did not wish to be named as they were not authorized to speak to the media.

Following the news of the potential fine, shares of Ant’s affiliate, Alibaba Group, rose as much as 6.4% in Hong Kong. This development comes as the Chinese government aims to stabilize private sector confidence by finalizing penalties and clarifying compliance boundaries. Rukim Kuang, founder of Lens Consulting, emphasized the importance of these moves in restoring confidence in the private sector.

Ant Group, founded by Jack Ma, is involved in payment processing, consumer lending, and insurance products distribution. It was valued at over $300 billion before its IPO was cancelled. Since April 2021, Ant has been undergoing a business restructuring to become a financial holding company, subjecting it to similar rules and capital requirements as banks. The fine is expected to focus on Ant’s alleged violations related to a “disorderly expansion of capital” and the resulting financial risks.

The announcement of the fine on Ant Group coincides with the appointment of Pan Gongsheng as the party secretary of the People’s Bank of China. Pan has been overseeing Ant’s revamp and has been involved in discussions about the fine and the company’s restructuring. The National Financial Regulatory Administration (NFRA) is now the primary regulator responsible for granting Ant the financial holding company license.

The final amount of the fine has been revised to at least 8 billion yuan, surpassing the initial estimate of 5 billion yuan. This penalty would be the largest ever imposed on a Chinese internet company, surpassing the record fine of 18 billion yuan imposed on Alibaba for antitrust violations. The fine on Ant Group comes at a time when Chinese authorities are eager to boost private sector confidence and stimulate economic recovery.

The fine also follows Jack Ma’s return to China earlier this year after a period of absence. Ma, who also founded Alibaba, had withdrawn from public view after criticizing China’s regulatory system, which many believe triggered the regulatory crackdown. Ma has relinquished control of Ant Group as part of the company’s restructuring.

In conclusion, Chinese authorities are expected to announce a significant fine on Ant Group, marking the end of the company’s regulatory overhaul. This fine will have implications for the broader technology sector in China and is seen as a step towards concluding the regulatory crackdown on private enterprises. The fine will allow Ant Group to secure a financial holding company license and revive its plans for a stock market debut.

Have a tip we should know? tips@rhd.news

Most Read

  1. News
    Pandora Papers Financial Leak Shows Us the Secrets of the World’s Rich and Powerful
    3 years ago
  2. Health
    US Supreme Court Rejects J & J TALC Cancer Case Appeal
    3 years ago
  3. Lifestyle
    9 Habits that Drain your Daily Focus and How to Avoid Them
    3 years ago
  4. BUSINESS
    Women’s Demand for Shapewear – the big Trends
    3 years ago
  5. BUSINESS
    Valentino Launches its Cosmetics Line
    3 years ago
  6. Health
    US Promises to Share 60 million Doses of AstraZeneca Vaccines
    3 years ago
  7. Health
    UK Offers Aid Amid Surging COVID-19 Cases in India
    3 years ago
  8. Sports
    Thousands of fans welcome Charlton funeral cortege at Old Trafford
    9 months ago
  9. News
    Brit left fighting for life after train derails in Argentinia
    9 months ago
  10. BUSINESS
    Dubai faces down airline rivals with $50 bln jet orders
    9 months ago
  11. Sunak
    UK’s Sunak brings back Cameron, sacks Braverman
    9 months ago
  12. Sports
    Man United’s Hojlund, Eriksen withdrawn from Denmark team duty
    9 months ago
  13. Health
    Autumn Sneezing Syndrome is on the rise… here’s what you can do
    9 months ago
  14. Canada
    Canada beat Italy to win Billie Jean King Cup for first time
    9 months ago

Follow @rushhourdaily: