China fines Ant Group by almost US$ 1 billion – 07/07/2023 – Market

Authorities in China on Friday announced a fine of 7.12 billion yuan ($984 million) for Ant Group, ending a years-old regulatory review of the fintech, in a key step to complete a crackdown on the country’s internet sector.

The country’s central bank, which conducts Ant’s review following the cancellation of the company’s IPO (initial share offering) at the end of 2020, announced a fine of Ant of 7.1 billion yuan, requiring the company to cease operations. of its Xianghubao crowdfunded health care service and compensate users.

The penalty amounts to one of the largest fines ever imposed on an internet company in China.

Ant and its subsidiaries violated laws concerning corporate governance and consumer financial protection, and engaged in business activities that should be conducted by banking and insurance institutions, the Chinese central bank said.

Thereafter, financial regulators “will focus on improving ‘normalized’ levels of supervision of platform companies’ financial affairs and placing all types of financial activities under supervision,” the monetary authority said.

Ant stated that it has completed its rectification work. “We will comply with the terms of the penalty in all seriousness and sincerity and will continue to further enhance our compliance governance.” The group closed Xianghubao in 2021.

Founded by billionaire Jack Ma, Ant operates the mobile payment app Alipay and carries out consumer lending and distribution of insurance products, among other businesses.

Since April 2021, Ant has been formally undergoing a comprehensive corporate restructuring, which includes transforming it into a financial holding company that would subject it to bank-like rules and capital requirements.