China orders Ant Group to rein in unfettered expansion as regulators put up fences around financial risks

Name: China kicks off antitrust probes into Alibaba over alleged monopolistic practices
Uploaded: 2020-12-27T09:06:34.000Z
Duration: 1 min 26 s
Description: China kicks off antitrust probes into Alibaba over alleged monopolistic practices

Ant ignored regulatory requirements, engaged in regulatory arbitrage and squeezed peers by using its market-leading status, says Pan Gongsheng, the deputy governor of China’s central bank

Rectification an opportunity for Ant to ‘strengthen the foundation for our business to grow with full compliance’

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Ant headquarters in Hangzhou, China. The country’s regulators on Sunday underlined the fintech giant’s failure to meet regulatory requirements and its monopolistic behaviour. Photo: EPA-EFE

Iris Ouyang

Published: 5:06pm, 27 Dec 2020Updated: 11:22pm, 27 Dec 2020

Ant Group, the world’s largest fintech company, has been instructed to rein in the influence of technology on its financial services as China’s financial regulators ring fence the industry to prevent uncontrolled growth in the industry from leading to financial risks.

Ant must return to its origins in online payments and prohibit irregular competition, protect customers’ privacy in operating its personal credit rating business, establish a financial holding company to manage its businesses, rectify any irregularities in its insurance, wealth management and credit businesses, and run its asset-backed securities business in accordance with regulations, the People’s Bank of China’s deputy governor Pan Gongsheng said in a statement on Sunday.

Delivered in the form of answers to questions from the media, the statement underlined the fintech giant’s failure to meet regulatory requirements and its monopolistic behaviour. It also outlined the requirements that the company must now meet as soon as possible, including the creation of a revamp plan and an implementation timetable.

“Ant needs to return to its roots of [electronic] payments,” Pan said, laying out the company’s first regulatory requirement. He was speaking on behalf of China’s major financial regulators, including the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange.

Ant ignored regulatory requirements, engaged in regulatory arbitrage and squeezed peers by using its market-leading status, he added.

Ant’s highly anticipated dual initial public offering was halted in early November, and Beijing has since stepped up its regulation of the country’s internet and technology sectors. This month, the Politburo, the Communist Party’s top decision-making body, vowed to step up its antitrust efforts and prevent “disorderly capital expansion”.

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China kicks off antitrust probes into Alibaba over alleged monopolistic practices

The ring fence around Ant’s fintech business is part of an overall move against the twin pillars of Alibaba Group Holdings’ sprawling internet business – Alibaba’s e-commerce platform and affiliate Ant’s fintech business. Alibaba owns South China Morning Post.

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