Home industry banking-and-finance china to stop Ant Group's regulatory reform, fines the firm $1.1B
Banking And Finance
CIO Bulletin
2023-07-07
Chinese authorities hope to announce a fine of nearly 8 billion yuan ($1.1 billion) against Ant Group as early as this Friday.
In theory, this will put an end to the fintech firm's protracted regulatory overhaul. Announcing the fine is expected to happen soon, according to sources at the People's Bank of China (PBOC), whose efforts have been pushing Ant's transformation ever since its $37 billion IPO was shelved in late 2020.
The fine, which would rank among the highest ever levied against an internet company in the country, will aid the fintech business in obtaining a financial holding company license, pursuing growth, and ultimately reviving its plans for a stock market debut.
A fine would be a significant step towards China's brutal crackdown on private enterprises, which began with the cancellation of Ant's IPO and has since caused the market value of numerous companies to drop by billions. This crackdown has had a negative impact on the entire technology sector.
After the news broke, Hong Kong shares in Ant's affiliate, e-commerce behemoth Alibaba Group, surged as much as 6.4% before giving back some of the gains.
Rukim Kuang, the founder of Beijing-based Lens Consulting, stated to the media that steps taken by the Chinese government to finalize penalties, clarify its expectations, and draw clear compliance boundaries are essential to stabilizing private sector confidence.
Ant, a firm founded by billionaire Jack Ma, engages in a variety of businesses, including the distribution of insurance products and the processing of payments. Before its IPO was canceled in the middle of 2020, some investors valued it at over $300 billion.
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