China slaps Ant Group with a almost $1.0 billion penalty

July 10, 2023: On Friday, China’s central bank beat Alibaba fellow Ant Group with a 7.12 billion yuan penalty.

The People’s Bank of China, which issued the penalty, said that the penalty was in response to different rules and regulations violations, including corporate control, consumer protection, and anti-money laundering requirements.

The fine is one of the largest against a Chinese internet firm. It looks to conclude the years-long scrutiny and restructuring of Ant Group after its blockbuster $37 billion initial general offering was scrapped in late 2020.

Ant has been forced to overhaul its business since that moment, which sparked an intense two-year crackdown from Beijing on China’s domestic tech sector. This included turning itself into a financial holding company under the purview of the PBOC.

Alibaba owns around a 33% stake in Ant Group, and Chinese billionaire Jack Ma is the founder of both companies.

Authorities canceled Ant’s listing over regulatory concerns in 2020.

Recent signs have emerged that Ant has been on the right side of regulators. In January, the group received approval to expand its consumer finance business.

The satisfactory and potential resolution to Ant’s regulatory woes comes as China looks to inject life into private industry amid a complex domestic economic picture.

In its Friday statement, the PBOC stated that most of the problems in the financial business of so-called platform businesses, such as Ant Group, have been rectified. The central bank’s job is now “normalized supervision,” suggesting that strict measures like fines may be calming down.

On Friday, Ant Group said in a statement that it will “suit with the terms of the penalty in all earnestness and sincerity and continue to enhance our compliance governance further.”

A possible listing for Ant Group is likely now in the spotlight, although the company’s valuation has dropped significantly over the last two and a half years.