BEIJING – The Chinese central bank announced on Sunday that it has closed the payment giant Ant Group Co Ltd. of the country to shake up its lending and other consumer financial activities, the latest blow to billionaire founder and controlling shareholder Jack Ma.
The announcement came more than a month after Chinese regulators abruptly suspended the $ 37 billion IPO in Shanghai and Hong Kong, and just days after the country's antitrust authorities said they had launched an investigation into Ma & # 39; s e-commerce conglomerate Alibaba Group Holding Ltd.
Chinese regulators and Communist Party officials have begun to curb Ma & # 39; s sprawling financial empire after he publicly criticized the country's regulatory system in October for suppressing innovation.
Regulators have urged Ant to correct violations of financial regulations, including in its credit, insurance and wealth management companies, and to review its credit rating activities to protect personal information, the People's Deputy Governor said. s Bank of China (PBOC) Pan Gongsheng on Sunday.
Pan's comments did not call for Ant's breakup, but pointed to a sweeping operational restructuring. Ant would have to set up a separate holding company to ensure capital adequacy and regulatory compliance, Pan said.
Ant must also be fully licensed to conduct his personal credit business, and be more transparent about his third-party payment transactions and not participate in unfair competition, Pan added.
Ant said in a statement it would create a "rectification" working group and fully implement the legal requirements.
Ma was advised by the Chinese government to stay in the country, Bloomberg News reports, citing a person familiar with the case. Ma was not available for comment.
Pan said Ant representatives met with officials from the PBOC and other Chinese banking, securities and foreign exchange regulators on Saturday.
At the meeting, regulators pointed out Ant's problems, including poor corporate governance, opposition to regulatory demands, illegal regulatory arbitrage, using its market advantage to express competitors and harming consumers' legal interests, Pan said.
Ant has its roots in Alipay, which was launched as a payment service in 2004 and is 33% owned by Alibaba. The Alipay app dominates digital payments in China, with more than 730 million monthly users. The Hangzhou-based company also built an empire that connected Chinese borrowers and lenders and secured short-term loans within minutes. It was about to be valued at over $ 300 billion on its stock market debut.
Last month, China issued draft rules to prevent monopolistic behavior by internet companies, and the Politburo this month pledged to step up anti-monopoly efforts in 2021 and curb "disorderly capital expansion."
China also warned internet giants this month to brace themselves for more scrutiny as it imposed fines and announced investigations into mergers involving Alibaba and Tencent Holdings Ltd. were involved.
(Reported by Stella Qiu, Cheng Leng, Yilei Sun, Echo Wang, and Ryan Woo; edited by William Mallard and Richard Chang)
Photo: In this photo taken Friday, October 23, 2020, an employee walks past a logo of the Ant Group at its Hong Kong office. Photo credit: AP Photo / Kin Cheung.
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