Summary
CompaniesAnnouncement marks end of firm’s regulator-driven overhaul
Symbolic for tech industry chafing under regulatory crackdown
China c.bank also fines other firms such as Tencent’s Tenpay
Ant shelved its IPO in late 2020
Alibaba’s US shares jump 9%
HONG KONG, July 7 (Reuters) – Chinese authorities announced on Friday a 7.12 billion yuan ($984 million) fine for Ant Group, ending a years-long regulatory overhaul of the fintech company and marking a key step to concluding a crackdown on the country’s internet sector.
China’s central bank said that financial regulators would fine Ant and its subsidiaries a total of 7.12 billion yuan, require it to stop operations of its crowdfunded medical aid service Xianghubao and compensate users.
The penalty amounts to one of the largest ever fines for an internet company in China.
Ant and its subsidiaries had violated laws and regulations in areas including corporate governance, financial consumer protection, payment and settlement business, as well as anti-money laundering obligations, the People’s Bank of China (PBOC) said in a statement.
Ant said it had completed its rectification work. “We will comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance.” It closed Xianghubao in 2021.
Reuters reported earlier, citing sources, that Chinese authorities intended to unveil its fine on Ant as early as Friday.
Besides Ant, the Chinese authorities also announced they had fined Ping An Bank (000001.SZ), insurer PICC Property and Casualty (2328.HK), Postal Savings Bank (1658.HK) and Tencent Holdings’ (0700.HK) online payment platform Tenpay, with Tenpay given a penalty of nearly 3 billion yuan, for committing violations in areas such as customer data management.
“Most of the prominent problems for platform companies’ financial businesses have been rectified,” said the PBOC, adding that the financial regulators would next shift focus from focusing on specific companies to overall regulation of the industry.
ALIBABA SHARES JUMP
U.S.-listed shares in Ant’s affiliate, e-commerce titan Alibaba Group (9988.HK), rose 9% after the PBOC’s announcement. Earlier in the day, its Hong Kong shares jumped as much as 6.4% after the Reuters report before giving up some gains.
Ant’s penalty paves the way for the fintech firm to secure a financial holding company license, seek growth, and eventually, revive its plans for a stock market debut.
The National Financial Regulatory Administration (NFRA), a new government body under the State Council, is now the primary regulator to grant Ant the key license, according to the sources, who spoke on condition of anonymity.
The NFRA did not respond to a Reuters request for comment.
For the broader technology sector, the fine marks a key step towards the conclusion of China’s bruising crackdown on private enterprises, which began with the scrapping of Ant’s IPO in late 2020 and has subsequently wiped billions off the market value of…
Original from www.reuters.com