Caixin
Jan 16, 2021 05:25 AM
BUSINESS & TECH

Ant Group Is Working on Timetable for Overhaul, Central Bank Says

Regulators are in close contact with a special Ant team that’s drafting plans and a timetable to rectify its operations
Regulators are in close contact with a special Ant team that’s drafting plans and a timetable to rectify its operations

(Bloomberg) — China’s central bank said Ant Group Co. Ltd. is working on a timetable to overhaul its business while ensuring operations continue, offering little clue on how far the financial technology giant needs to go to satisfy authorities.

Regulators are in close contact with a special Ant team that’s drafting plans and a timetable to rectify its operations, People’s Bank of China Deputy Governor Chen Yulu said Friday at a regular briefing.

The message underscores China’s determination to rein in billionaire Jack Ma’s sprawling business. Global investors have been seeking signs of what the future holds for the world’s largest fintech company since the government abruptly halted Ant’s $35 billion initial public offering in November.

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While regulators stopped short of directly asking for a breakup of the company in December, the central bank stressed that Ant needs to “understand the necessity of overhauling” and come up with a timetable as soon as possible.

Ant is planning to fold its financial operations — including its consumer credit offerings — into a holding company that could be regulated more like a bank, Bloomberg reported last month. That company would also contain insurance, payments and MYbank, an online lender in which Ant is the largest shareholder. This move is aimed at complying with a new regulation that took effect in November on financial holding companies.

Chinese regulators are studying plans to force Ant to divest its minority investments in some financial companies, a person familiar with the matter said.

In response to proposed rules, Ant is planning to reorganize its consumer credit operations so the company can continue lending nationwide under new regulations that would otherwise threaten to dramatically restrict its most lucrative business, people familiar with the matter said.

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