Jack Ma’s Ant Group forced to restructure after China crackdown
Ant Group will be restructured as a financial holding company as part of a crackdown by Beijing on billionaire Jack Ma’s Alibaba empire.
China’s central bank today said Ant Group had laid out a “comprehensive and feasible restructuring plan” following pressure from regulators.
The agreement will mean the fintech firm cuts “improper” links between its payment service Alipay, virtual credit card product Jiebei and consumer loan product Huabei, the People’s Bank of China said.
The central bank also asked Ant Group to take a number of other steps, including breaking its monopoly on information and controlling the liquidity risk of its flagship fund products.
Ant Group had planned to go public in a $37bn initial public offering in November in what would have been the world’s largest ever IPO. But regulators blocked the deal, citing concerns about the links between its tech business and financial offerings.
Beijing has since launched a wider crackdown on Chinese tech giants in an effort to curb their ballooning power.
Over the weekend regulators handed down Ma’s Alibaba Group a record $2.8bn fine for abusing its market dominance.
The penalty, which is equivalent to four per cent of the company’s revenue in 2019, came after an antitrust investigation found Alibaba had forced merchants to sell products exclusively on its Tmall and Taobao ecommerce platforms.
The scrutiny has also spread to Alibaba’s rivals, many of whom are now bracing for similar fines.
Tencent last month confirmed it was in talks with Chinese antitrust regulators about compliance at the company.