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PBOC to Fine Ant Group $1 Billion as Part of Regulatory Overhaul

FP via Reuters | Julie Zhu  | Nov 22, 202

Ant Group  - PBOC to Fine Ant Group $1 Billion as Part of Regulatory OverhaulHONG KONG — Chinese authorities are poised to impose a fine of more than $1 billion on Jack Ma’s Ant Group, said six sources with direct knowledge of the matter, setting the stage for ending the fintech company’s two-year long regulatory overhaul.

  • >$1 billion regulatory fine:
    • The People’s Bank of China (PBOC), which has been driving the revamp at Ant after the Chinese firm’s $37 billion IPO was scuttled at the last minute in 2020, is the regulator that is readying the fine, said five of the sources.
    • Ant’s fine would be the largest regulatory penalty imposed on a Chinese internet company since ride-hailing major Didi Global was fined $1.2 billion by China’s cybersecurity regulator in July.
    • A fine on Ant could help pave the way for the company to secure a long-awaited financial holding company license, seek growth again, and eventually revive its plans for a public market debut.
    • The fintech firm’s affiliate, e-commerce titan Alibaba Group , last year received a record fine of 18 billion yuan ($2.51 billion) for antitrust violations.

See:  Jack Ma’s Double-Whammy Marks the End of China Tech’s Golden Age

  • Ant's Business Overhaul:
    • Chinese authorities abruptly pulled the plug on Ant’s IPO, which was set to be the world’s biggest, in November 2020 soon after billionaire founder Ma publicly criticized China’s regulatory system for stifling innovation.
    • The regulators also pushed Ant, whose businesses span payment processing, consumer lending and insurance products distribution, to revamp its business structure and bring it under tighter regulatory supervision.
    • Ant has been formally undergoing a sweeping business overhaul since April last year which includes turning itself into a financial holding firm, subject to rules and capital requirements similar to those for banks.

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