China’s digital payments giant Ant Group has been asked by China's central bank to bring in changes to its lending and other consumer finance operations in the latest blow by Chinese authorities to the billionaire founder and controlling shareholder Jack Ma of the company, the central bank disclosed on Sunday.
The first indication of a crackdown on Ant Financial became evident when the company’s blockbuster $37 billion initial public offering in Shanghai and Hong Kong was abruptly suspended a month ago by Chinese regulators. It was a couple of days ago the antitrust authorities of China had announced an investigation into the e-commerce conglomerate Alibaba Group Holding founded by Ma.
It is apparent that a campaign to reign in Ma's sprawling financial empire has been launched by Chinese regulators and Communist Party officials after Ma had openly criticised the regulatory system of China in October for supressing innovation.
People's Bank of China (PBOC) Vice Governor Pan Gongsheng said on Sunday that Ant has been ordered by the regulators to set right financial regulatory violations, including in its credit, insurance and wealth management businesses as well as overhauling of its credit rating business to that personal information of users are protected. The comments from Pan were just short of calling for breaking up Ant but did indicate the company making significant operational restructuring.
Pan said that in order to ensure capital adequacy and regulatory compliance, Ant should set up a separate holding company. And in order to carry out its personal credit business, Ant should also be fully licensed while also being more transparent and forthcoming about its third-party payment transactions, Pan said and added that Ant should not also engage in unfair competition practices.
A "rectification" working group would be established by it and it will implement the regulatory requirements completely, Ant said in a statement. According to a report published in Bloomberg News, that the Chinese government has advised Ma to stay in the country.
No comment on the issue was available from Ma.
A meeting between the PBOC and other Chinese banking, securities and foreign exchange regulators and Ant representatives was held on Sunday, Pan said. According to Pan, a number of issues with the business of Ant were pointed out by regulators during the meeting. Those included the poor corporate governance practices, defiance of regulatory demands, illegal regulatory arbitrage, the use of its market dominance to squeeze out competitors, and harming legal interests of consumers.
Launched in 2004, Alibaba owns 33 per cent of Ant.
In its stock market debut, the company was set to be valued at more than $300 billion. Draft rules aimed at preventing monopolistic behaviour by internet firms were issued by China last month.
Earlier this month, the Politburo of the Communist Party of China pledged to further strengthen its anti-monopoly efforts in 2021 and to rein in "disorderly capital expansion".
(Source:www.ndtv.com)
The first indication of a crackdown on Ant Financial became evident when the company’s blockbuster $37 billion initial public offering in Shanghai and Hong Kong was abruptly suspended a month ago by Chinese regulators. It was a couple of days ago the antitrust authorities of China had announced an investigation into the e-commerce conglomerate Alibaba Group Holding founded by Ma.
It is apparent that a campaign to reign in Ma's sprawling financial empire has been launched by Chinese regulators and Communist Party officials after Ma had openly criticised the regulatory system of China in October for supressing innovation.
People's Bank of China (PBOC) Vice Governor Pan Gongsheng said on Sunday that Ant has been ordered by the regulators to set right financial regulatory violations, including in its credit, insurance and wealth management businesses as well as overhauling of its credit rating business to that personal information of users are protected. The comments from Pan were just short of calling for breaking up Ant but did indicate the company making significant operational restructuring.
Pan said that in order to ensure capital adequacy and regulatory compliance, Ant should set up a separate holding company. And in order to carry out its personal credit business, Ant should also be fully licensed while also being more transparent and forthcoming about its third-party payment transactions, Pan said and added that Ant should not also engage in unfair competition practices.
A "rectification" working group would be established by it and it will implement the regulatory requirements completely, Ant said in a statement. According to a report published in Bloomberg News, that the Chinese government has advised Ma to stay in the country.
No comment on the issue was available from Ma.
A meeting between the PBOC and other Chinese banking, securities and foreign exchange regulators and Ant representatives was held on Sunday, Pan said. According to Pan, a number of issues with the business of Ant were pointed out by regulators during the meeting. Those included the poor corporate governance practices, defiance of regulatory demands, illegal regulatory arbitrage, the use of its market dominance to squeeze out competitors, and harming legal interests of consumers.
Launched in 2004, Alibaba owns 33 per cent of Ant.
In its stock market debut, the company was set to be valued at more than $300 billion. Draft rules aimed at preventing monopolistic behaviour by internet firms were issued by China last month.
Earlier this month, the Politburo of the Communist Party of China pledged to further strengthen its anti-monopoly efforts in 2021 and to rein in "disorderly capital expansion".
(Source:www.ndtv.com)
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