Advertisement

Ant Group reaches deal with China’s financial regulators on business overhaul – sources

  • Ant Group is likely to place credit, investment and insurance platforms in a holding company overseen by Beijing-based watchdogs
  • Regulators shelved Ant Group’s US$34.5 billion IPO on November 3 over systemic risk and privacy concerns

Reading Time:3 minutes
Why you can trust SCMP
1
Ant Group lifts a cloud of uncertainty hanging over its business by reaching an agreement with regulators on its business overhaul. Photo: Reuters

China’s financial regulators and Ant Group, controlled by Chinese billionaire Jack Ma, have agreed a plan to overhaul the planet’s largest financial technology company, according to people familiar with the matter.

Advertisement

The scheme involves Ant Group placing its major businesses into a financial holding company overseen by Beijing-based watchdogs, including its fabulously lucrative credit origination platform, its investment technology unit and its budding insurance operations, the people familiar said.

An official announcement could come as early as next week, but its timing is dependent on formal sign-offs in Beijing. An agreement between Ant Group and the regulators would lift a cloud of uncertainty hanging over the firm’s day-to-day operations and from across the fintech industry. However, more robust regulations and higher compliance costs will curb growth at one of the world’s most valuable unicorns.
Ant Group operates mobile payments app Alipay. Photo: EPA-EFE
Ant Group operates mobile payments app Alipay. Photo: EPA-EFE

Regulators abruptly shelved Ant Group’s US$34.5 billion dual listings in Shanghai and Hong Kong on November 3, over concerns that the Hangzhou-based firm posed a systemic risk to the country’s financial system and was in breach of consumers’ privacy. Soon afterwards, Beijing unleashed a raft of new fintech regulations and an antitrust inquiry into the country’s technology sector.

Advertisement

Ant Group, which operates the ubiquitous Alipay mobile payments platform, has been preparing to restructure its businesses to comply with the new rules since even before launching its initial public offering (IPO). An Ant Group spokesman declined to comment on the firm’s discussions with regulators.

Advertisement