China orders Ant Group to rectify businesses
HONG KONG (AP) — Chinese regulators have ordered Ant Group, the world’s largest financial technology company, to rectify its businesses and comply with regulatory requirements amid increased scrutiny of anti-monopoly practices in the country’s internet sector.
The People’s Bank of China, the country’s central bank, summoned Ant executives on Saturday and ordered them to formulate a rectification plan and an implementation timetable of its business, including its credit, insurance and wealth management services, the regulators said in a statement Sunday.
The statement said that Ant Group lacked a sound governance mechanism, defied regulatory compliance requirements and engaged in regulatory arbitrage. It also said that the company used its market position to exclude rivals and hurt the rights and interests of consumers.
The meeting came after Chinese regulators last month halted Ant’s $37 billion stock debut in Shanghai and Hong Kong over regulatory changes, and comes just days after China announced an anti-monopoly investigation of e-commerce giant Alibaba Group, which owns a 33% stake in Ant Group.
The orders from regulators could limit Ant Group’s expansion and throw its lucrative finance businesses into disarray.
Ant Group, which started out as a payments services for Alibaba’s e-commerce platform Taobao, has since expanded to offer insurance and investment products to its hundreds of millions of users in mainland China. Jack Ma, the founder of both Alibaba and Ant Group, is one of China’s richest and most prominent entrepreneurs.
Regulators ordered Ant Group to establish a financial holding company and hold sufficient capital. They also said that Ant Group should return to its payments origins, enhance transparency around transactions and prohibit unfair competition, while improving corporate...
