According to a joint statement by the China Securities Regulatory Commission, the People’s Bank of China, and the National Financial Regulatory Administration, Ant Group has also violated regulations related to banking and insurance business activities, payments, anti-money laundering, and funds sales.
In response to the fine, Ant Group expressed its commitment to comply with the penalty and further improve its compliance governance, stating this in a released statement.
Ant Group is a subsidiary of the prominent e-commerce company Alibaba, which was also established by Jack Ma.
The market value of Alibaba witnessed a significant increase on Friday as investors anticipated that the imposed fines would mark the end of the regulatory crackdown. The crackdown was initiated in November 2020 when Ant Group was compelled to halt its initial public offering (IPO) shortly before its scheduled launch. The IPO had the potential to raise $37 billion, making it the largest share sale in history.
This incident served as a starting point for a broader initiative by the Chinese government to rein in the influence of private enterprises, which had become exceedingly dominant from the perspective of the ruling Communist Party. In April 2021, Alibaba was hit with a record-breaking fine of 18.2 billion yuan ($2.5 billion) for engaging in monopolistic behavior.
In January, Guo Shuqing, who leads the Communist Party at the People’s Bank of China, informed the state-run Xinhua news agency that the government’s regulatory crackdown was mostly over, with the objective of boosting economic growth, jobs, and China’s competitiveness worldwide.
Within the same month, Jack Ma had relinquished the control of Ant Group, following the firm’s two-year-long efforts to rework its business, from consumer lending to insurance products, for the purpose of pleasing regulatory authorities.
Alibaba subsequently disclosed its intentions to divide its business into six distinct units, each supervised by a separate CEO and board of directors. The company stated that this new structure would enable it to establish more agile businesses capable of generating greater value for investors.
In unrelated news, as per the details specified on the PBOC website on Friday, China’s financial regulators declared a fine of almost 3 billion yuan ($415 million) for Tenpay, Tencent’s (TCEHY) digital payment platform.
