Friday saw China's central bank impose a 7.12 billion yuan ($985 million) fine upon Ant Group, an affiliate of Alibaba. Last year the regulators caused the scrapping of Ant's highly anticipated initial public offering (IPO) and pushed through a restructuring of the business. Nevertheless, in January indicators emerged that the firm was back in favour with regulators, when it was granted the authority to develop its consumer finance activity.
On Friday, China's central bank slapped Ant Group, an affiliate of Alibaba, with a fine of 7.12 billion yuan ($985 million) over violations of various laws and regulations such as corporate governance, consumer protection and anti-money laundering. This penalty, one of the biggest ever imposed on a Chinese internet firm, marks the culmination of the two-year regulatory scrutiny and restructuring of Ant Group, which had been preparing for a record-breaking $37 billion initial public offering when authorities halted it in late 2020. With Alibaba possessing around a 33% stake in Ant Group and its founder Jack Ma overseeing both companies, the market is expecting a likely listing for Ant Group though its valuation has declined substantially over the last two and a half years. The People's Bank of China expressed in its Friday statement that most of the issues with "platform companies" have already been resolved, and its job is now to perform "normalized supervision," suggesting the intense scrutiny may be waning. Ant Group has pledged to fulfill the terms of the fine and to further its compliance governance. This comes as China looks to revive private industry during a difficult economic period.
Since November 2020, Chinese regulators have taken action to constrain the domestic tech sector, surprising investors and causing billions of dollars of losses for the nation's tech behemoths. Jack Ma's Alibaba Group and Ant Group were particularly subjected to regulatory scrutiny; for instance, Alibaba was penalized with a fine of $2.8 billion in 2021. Subsequent to the withdrawal of the Ant Group IPO offering, the outspoken billionaire Ma had stayed out of the public eye until his recent re-emergence. Other tech firms have also been in the sights of Chinese regulators; for example, Meituan, a food delivery giant, was fined 3.44 billion yuan in 2021 and Didi, a ride-hailing giant, was penalized 8.02 billion yuan in 2020 for breaching data security regulations.
Kommentare