Central Financial institution Tells Ant: Focus On Funds
China’s financial regulators are trying to curb the influence of Jack Ma’s Ant Group by asking them to get back to their core business of payments while fixing issues with personal lending, asset management and more, Wall Street reports Journal (WSJ).
The People’s Bank of China criticized Ant on Sunday (December 27) for how it treated competitors and consumers and also apparently disregarded regulations. There wasn’t much more detail than that.
The Central Bank of China statement came after meeting with representatives from Ant and regulators from the country’s securities, banking and foreign exchange sectors, who were presented as Q&A with PBOC Deputy Governor Pan Gongsheng.
Ant said he appreciates the bank’s statements and will work towards compliance, including creating a timeline and action plan, WSJ writes.
The regulations will mean Ant, one of the world’s most valuable startups, will have to curb its advances in lucrative business areas. The reduced magnitude could have an impact on Ant’s earnings potential and market valuation if it tries again to go public.
Ant’s much-anticipated double IPO was suspended by the government earlier this year. The initial public offering, which would have been listed on both Hong Kong and Shanghai markets and should raise $ 34 billion, would have been the largest in the world by then.
The government, and President Xi Jinping in particular, did it after Ma gave a speech criticizing government regulations, writes PYMNTS. Ma had previously clashed with regulators, with regulators aware of Ma’s growing power in the markets. His statement in October said that the government had overregulated companies, “angry” with the government and prompting Xi to go public.
After the IPO collapse, Ant took a step to tighten credit limits for some users in Huabei to encourage more “rational” spending habits.
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