Ant Group Gets a Reprieve as China Eases Crackdown
As regulators in China prepare to end a multi-year industry crackdown, the financial technology giant Ant Group, an Alibaba Group Holding Ltd subsidiary, will likely face reduced penalties. According to Reuters’ reports, regulators have proposed lowering the proposed fine from over $1 billion to 5 billion ($728 million). Since the People’s Bank of China (PBOC) blocked Ant’s $37 billion IPO in 2020, it has been spearheading the company’s business overhaul. The announcement of the fine by the authorities in the coming months will likely smooth the way for the fintech firm to finally obtain a financial holding company license, pursue growth, and make its market debut.
Additionally, Chinese authorities are reconsidering their charges against Ant, with financial risks and operating certain businesses without proper license now being cited as the triggers for the fine instead of alleged violations associated with “disorderly expansion of capital.” As per IPO news, since April 2021, Ant has undergone a massive reorganization, one of the results of which is that it is now a financial holding company subject to regulations and capital demands similar to those imposed on banks. Ant founder Jack Ma agreed to hand over control in January as part of the reorganization.
Beijing’s stance with the private sector is reflected in the reduced penalty following Jack Ma’s comeback after his overseas tenure of over a year since the IPO fiasco. Premarket trading on Tuesday saw shares of Alibaba rise 2.68 percent to $99.00. The reduction in Ant Group’s fine and the change in the authorities’ stance should make it easier for the firm to pursue growth opportunities in the Chinese and international financial technology markets.
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