Chinese regulators Ant Group Co., including the company after convening fintech giants on Saturday, returned to its origins as a payment service provider and reformed lending, insurance and wealth management services.
The authorities also criticized Ant, saying that its corporate governance is poor, it disdains regulatory compliance requirements, and participates in regulatory arbitrage. The People’s Bank of China said that ants use their own advantages to exclude competitors, thus harming the interests of consumers.
China began an investigation into Alibaba Group Holdings Ltd.’s alleged monopolistic behavior on Thursday, and convened its affiliate Ant Financial to participate in a high-level meeting on financial regulations to review the double pillar of the billionaire Jack Ma’s Internet sector. The pressure on Jack Ma is essential for greater efforts to contain the increasingly influential Internet sector.
Once known as the driving force of economic prosperity and a symbol of national technological strength, the empire established by Jack Ma “Little horse” Ma Huateng, chairman of Tencent Holdings Co., Ltd., and other tycoons have now received widespread attention because it has attracted hundreds of millions of users and has affected almost every aspect of daily life in China.
Jack Ma’s empire is in a state of crisis. People familiar with the matter said that as of early December, when Ant Financial was under regulatory review, the government suggested that the man most closely related to the rapid rise of Chinese companies was left in China. Since November, the market value of Alibaba itself has shrunk by more than US$100 billion, when regulators used torpedoes to blow up a record US$35 billion of Ant Financial.
His senior management is part of a working group that has interacted with watchdogs almost daily. At the same time, people familiar with the matter said that at the same time, regulatory agencies, including the China Banking and Insurance Regulatory Commission, are weighing which companies should give up control in order to control the risks that Ant Financial poses to the economy. They have not yet decided whether they want to continue operating their different businesses, split their online and offline services, or take a different path entirely.
read more: Ma Yun became quiet after the spectacular retreat of the Ant Group
-With the assistance of John Liu, Jessica Sui and Jun Luo
(Update more details from the second paragraph.)