China’s central bank hit Alibaba affiliate Ant Group with a whopping 7.12billion yuan fine (~$985 million).
The People’s Bank of China (PBOC), which issued the hefty fine, said that the penalty was in response to Ant’s violations of various laws and regulations, including around corporate governance, consumer protection and anti-money laundering requirements.
imposed the fine on the financial technology provider on Friday, stating that Ant had violated laws and regulations related to corporate governance, financial consumer protection, participation in business activities of banking and insurance institutions, payment and settlement business, and attending to anti-money laundering obligations.
It must be noted that this is one of the biggest fines against a Chinese internet firm and looks to conclude the years-long scrutiny and restructuring of Ant Group, after regulators pulled the plug on its $37 billion IPO plans in late 2020. This followed Jack Ma’s intense criticism of state-owned banks in a summit a few prior to the IPO launch.Â
“We will comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance,” Ant Group said in a press statement.
Since then, Beijing came down heavily on China’s domestic tech sector and Ant was forced to overhaul its business, included turning itself into a financial holding company under the purview of the PBOC.
Alibaba owns nearly 33% stake in Ant Group, and billionaire Jack Ma is the founder of both firms.
The move is widely seen as the end of Beijing’s crackdown and allowing Ant to revive its initial public offering. Other firms that were also fined include Chinese gaming firm Tencent, which operates WeChat and Tenpay that received a 2.99 billion yuan fine ($414 million) for regulatory violations over its payments services.Â
Tencent’s chairman, Ma Huateng, said he believed the government could now move on to “supporting and encouraging platform companies”.
Soon after the news of the hefty fines broke, Jack Ma-backed Ant Group proposed a share buy back plan at nearly 70% below its proposed initial public offering price in 2020. It’s seen as an effort to retain talent and offer an exit for investors ensnared by a years-long regulatory crackdown at the company. The company has offered to repurchase up to $6 billion in shares at a valuation of roughly $78.5 billion.Â
Hong Kong shares of Alibaba Group opened 5.5% higher on Monday.Â
