Ant Group, the online finance company of Chinese e-commerce giant Alibaba, announced a major overhaul of its business on Monday Chinese government demandsmoving fast to contain the power of the country’s internet giants.
Beijing’s campaign made the corporate empire of Jack Ma, Alibaba’s billionaire co-founder and majority shareholder, an early target. China’s antitrust agency on Saturday Alibaba fined $ 2.8 billion for abusing its dominance in digital retail – a record amount for violating the country’s antimonopoly law.
As part of what both the Ant Group and Chinese officials referred to as the “adjustment plan,” the company said Monday it would seek the establishment of a financial holding company, which would bring closer monitoring and requirements to hold more money than it did otherwise it could lend or use it profitably.
Ant also said it would change the way personal information is collected and used to improve data security and prevent misuse. And it said it would improve corporate governance to better comply with fair competition rules.
“Under the guidance of the financial regulators, the Ant Group will spare no effort to implement the rectification plan,” said the company said in a statement. “The Ant Group will use the rectification as an opportunity and increase our commitment to consumers, small businesses and the real economy.”
Chinese officials forced Ant to do so cancel the blockbuster IPO last November, just days before the expected debut of its stocks. A month later, regulators ordered Ant to correct what they called a Litany of mistakes in his businessThis includes a range of financial services, from payments to loans, offered through the Alipay app.
Alipay’s user base of more than 700 million people in China gives Ant a tremendous impact on the country’s financial system.
China said for the first time last September that companies that own two or more financial companies would need to register as financial holding companies and be subject to increased government oversight. In one press conference At the time, an official from China’s central bank named Ant one of several companies likely to be restructured under the new rules.
According to official information, the aim is to better monitor the systemic risks that have arisen from the “blind” entry of non-financial companies into the financial sector.