Six people with firsthand knowledge of the situation indicated that Chinese authorities are prepared to punish Jack Ma’s Ant Group more than $1 billion, putting an end to the fintech company’s two-year regulatory makeover.
Five of the sources identified the regulator preparing the fine as the People’s Bank of China (PBOC), which has been driving the revamp at Ant since the Chinese firm’s $37 billion IPO was abruptly scrapped in 2020.
According to three of the people, the central bank has been in informal contact with Ant regarding the issue over the past few months. According to a source, it intends to continue talking with other regulators regarding Ant’s redesign later this year and announce the penalty as early as the second quarter of the following year.
A penalty against Ant might make it easier for the business to obtain a license as a financial holding company, pursue expansion once more, and finally rekindle its intentions for a public market debut.
Since Didi Global, the world’s largest ride-hailing operator, was fined $1.2 billion by China’s cybersecurity authority in July, Ant’s fine would be the greatest regulatory sanction imposed on a Chinese internet company.
Alibaba Group, the world’s largest online retailer, was fined a record 18 billion yuan ($2.51 billion) last year for antitrust violations by the fintech company’s affiliate.
The fines are a part of Beijing’s extensive campaign against the nation’s tech giants, which has reduced their value by hundreds of billions of dollars and reduced their revenues and profits.
However, in an effort to support an economy that has been harmed by the COVID-19 pandemic, Chinese authorities have recently toned down their rhetoric regarding the tech crackdown.
According to one of the sources, Ant’s alleged violations regarding a “disorderly expansion of capital” and the ensuing financial risks that its once unrestrained businesses have generated will likely be the focus of the fine.
