Jack Ma, who started and grew up in China on the back of e-commerce and by pulling in Chinese powerbrokers, has apparently become the subject of special attention from the Chinese government, which has recently been trying to regulate or crack down on him, following the announcement on December 27 that China’s financial regulator had interviewed the head of Ma’s Ant Group and issued a directive to them.
AFP reported that Chinese e-finance giant Ant Group was ordered by regulators to drastically change its business model and return to its roots as an electronic payments provider, while Beijing’s squeeze on Ma’s once unchecked business empire continues.
The order comes just weeks after Beijing ordered a last-minute halt to Ant Group’s record-breaking IPO. Beijing has been relentless in bringing down a company once seen as a model for China’s technology industry.
Reuters reported that China’s central bank revealed on Sunday it had asked the country’s e-payment giant Ant Group to fundamentally overhaul its lending and consumer finance business. It’s the latest blow to its billionaire founder and controlling shareholder Jack Ma.
A little more than a month ago, Chinese regulators abruptly called off Ant Financial’s huge $37 billion initial public offering in Shanghai and Hong Kong. Just days earlier, China’s antitrust authorities said they had launched an investigation into Jack Ma’s e-commerce company Alibaba Group. Alibaba holds a 33 percent stake in Ant Group.
Chinese regulators and Communist Party officials began disciplining Jack Ma’s expanding financial empire after he publicly criticized China’s financial regulatory system in October for stifling innovation.
The Associated Press reported that China’s financial sector regulator ordered Ant Group, the world’s largest fintech company, to overhaul its operations and submit to regulatory requirements. Authorities have intensified their focus on anti-monopoly issues in China’s Internet industry.
The People’s Bank of China, the central bank, interviewed Ant executives Saturday and ordered them to draw up a rectification plan for its credit, insurance and wealth management businesses and a timetable for their implementation, a statement issued by the regulator said Sunday.
The statement said Ant Group lacked an effective management mechanism, flouted regulatory compliance requirements, engaged in regulatory arbitrage violations and used its market position to crowd out competitors and harm consumers’ rights.
The order from the regulator could limit Ant Group’s expansion and development and throw its lucrative financial services business out of whack.”
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