Ant Group fined £769 million by Chinese regulators
7 July 2023, 21:24
The company said it would ‘comply with the terms of the penalty in all earnestness’.
Chinese regulators said they have fined Ant Group 7.123 billion yuan (£769 million) for violating regulations in its payments and financial services.
It is thought that the move may be an indicator that more than two years of scrutiny and crackdown on the firm that led it to scrap its planned public listing may have come to an end.
The People’s Bank of China imposed the fine on Friday stating that Ant Group had violated laws and regulations related to corporate governance, financial consumer protection, participation in business activities of banking and insurance institutions, payment and settlement business, and attending to anti-money laundering obligations.
The fine comes more than two years after regulators pulled the plug on Ant Group’s IPO, worth 34.5 billion US dollars (£26.8 billion) — which would have been the biggest of its time — in 2020.
Since then, the company had been ordered to revamp its business and behave more like a financial holding company, as well as rectify unfair competition in its payments business.
In a statement, Ant Group said: “We will comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance.”
The move is widely seen as wrapping up Beijing’s probe into the firm and to allow Ant Group to revive its initial public offering.
Chinese gaming firm Tencent, which operates the popular messaging app WeChat, also received a 2.99 billion yuan fine (£322.5 million) for regulatory violations over its payments services, according to the central bank Friday, signalling that the crackdown on the Chinese technology sector could ease.
Ant Group, founded by Alibaba co-founder Jack Ma, first started out as Alipay, a digital payments system aimed at making transactions more secure and trustworthy for buyers and sellers on its Taobao e-commerce platform.
The digital wallet soon grew to become a leading player in the online payments market in China, alongside Tencent’s WeChat Pay.
It eventually grew into Ant, Alibaba’s financial arm, which also offers wealth-management products.
In January, it was announced that Mr Ma would give up control of Ant Group.
The move followed other efforts over the years by the Chinese government to rein in Mr Ma and the country’s tech sector more broadly.
Two years ago, the once high-profile Mr Ma largely disappeared from view for two-and-a-half months after criticising China’s regulators.
Around the same time, the government also forced Ant Group to call off a highly-anticipated IPO that would have raised more than three billion US dollars (£2.3 billion), just days before it was due to launch.
Yet Mr Ma’s surrender of control came after other signs that the government was easing up on Chinese online firms.
At an economic work conference late last year, Beijing signalled it would support technology firms to boost economic growth and create more jobs.
Also in January, the government said it would allow Ant Group to raise 1.5 billion dollars (£1.16 billion) in capital for its consumer finance unit.
