China prohibits Jack Ma’s ant group, urges company to improve business rectangles – Business News

China prohibits Jack Ma’s ant group, urges company to improve business rectangles – Business News

Chinese regulators ordered Jack Ma’s online financial titan Ant Group Company to return to its roots as a provider of payment services, threatening to spur growth in its most lucrative businesses of consumer debt and wealth management.

The central bank summoned ant officials over the weekend and asked them to “reform” the company’s debt, insurance and wealth management services, the People’s Bank of China said in a statement on Sunday. However, the company stopped short of asking about the breakup, with the central bank insisting that Ant “needs to understand the need to overhaul its business” and come up with a timetable as soon as possible is.

The series of edits represents a serious threat to the expansion of Ma’s online finance empire, which has grown rapidly over the past 17 years from operations like PayPal to a full suite of services. Before the regulators would intervene, Ant was prepared for a public listing that would cost more than $ 300 billion. The central bank said that the Hangzhou-based firm now needs to move forward with establishing a separate financial holding company to hold sufficient capital, and protect private personal data.

“This is the culmination of a string of regulations and determines the direction for the ant to move forward,” said Zhang Xiaoxi, Beijing-based analyst at Gavakkal Dragonomics. “We have not yet seen clear signs of a break-up. Ant is a huge player in the world and one needs to be alert for any breakup. “

Authorities also blasted Ant for subcontracting corporate governance, scorned for regulatory requirements and engaged in regulatory arbitration. The central bank said that Ant used its dominance to outmaneuver rivals, hurting the interests of millions of its consumers.

China stepped up scrutiny of two pillars of billionaire Ma’s Internet domain last week after it closed an investigation into alleged monopoly practices in AN affiliate Alibaba Group Holding Limited. the inspection.

The state administration for market regulation sent investigators to Alibaba on Thursday and, according to Saturday’s report on a news app run by Zhejiang Daily, completed site investigations on the day. The report cited an unnamed official from the local market regulation watchdog of Zhejiang Province, where Alibaba is based.

Pressure on Ma is central to a broader effort to stop the increasingly influential Internet sector.

Once instigated as a driver of economic prosperity and a symbol of the country’s technical prowess, Ma, the empire created by “Pony” Ma Huateng, chairman of Tencent Holdings Ltd., and other tycoons, is now under scrutiny after crores of users accumulate. Are in Getting influence on almost every aspect of daily life in China.

Ma’s own empire is in crisis mode. In early December, the person most closely identified with China Inc.’s meteorite rise, with Ant under regulatory scrutiny, was advised by the government to remain in the country, a person familiar with the matter has said. Alibaba has shed more than $ 200 billion in market value since November, when regulators targeted whether $ 35 billion would be the first record.

Their top officers are part of a task force that already has almost daily interactions with watchdogs. Meanwhile, regulators, including China’s Banking and Insurance Regulatory Commission, weigh in on which businesses should relinquish control to Ant to control the risks to the economy, officials familiar with the matter have said. They have not settled on scaling its various lines of operations, dividing its online and offline services, or following a different path altogether.

“Ant’s growth potential will be capped with a focus on its payment services,” said Shujin Chen, head of Hong Kong, China’s head of financial research at Jefferies Financial Group Inc. Market share largely reached its limits. “

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