Jack Ma’s ANT Group is Under The Radar of Chinese Regulators

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The Chinese government is now accelerating efforts to get Jack Ma’s Ant Company closer to ‎its influence as part of a rectifying campaign that will render it impossible for one of the ‎wealthiest men in the world to completely restore its online empire. ‎

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‎ ‎Three sources with knowledge of the matter say Chinese regulators are reviewing Ant Group ‎Co Ltd’s equity investments in dozens of companies, intensifying a crackdown on billionaire ‎Jack Ma’s financial technology empire. One of the three sources said regulators are ‎considering ordering Ant to divest any of its assets if they break any laws, such as causing ‎excessive competition in the industry.


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Two of the three sources said that regulators are looking into Ant investments over the last ‎few years, the rationale behind such deals, and their synergies. They declined to be identified ‎since they are not authorized to speak to the media. ‎

According to one of the sources, regulators would like Ant, whose businesses include ‎payment processing, consumer lending, and insurance products distribution, to divest some of ‎its investments unless they are indispensable to the sales of the company’s products.
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According to Refinitiv data, the fintech giant founded and controlled by Ma has made 81 ‎equity investments worth $21.6 billion, including a stake in a Chinese state bank and a stake ‎in an Indian digital payment processor.‎

Ant Group is the parent company of China’s biggest electronic payment network, Alipay, and ‎the world’s leading transparent platform for financial technology. Alibaba owns 33% of the ‎company.‎

According to people briefed regarding negotiations between the central bank and the firm, ‎the consumer lending unit of Ant and other fast-growing sections of the financial technology ‎sector would be split into a separate financial holding company to be controlled by the ‎People’s Bank of China.

Ant would come under the control of the regulators Mr. Ma has ‎long fought against, with public critiques that irritated government authorities and officials at ‎China’s state-owned banks.‎

Ant was rebuked by the People’s Bank of China in a public statement this past weekend, ‎which called for its overhaul and claimed that it was ” ignoring compliance requirements “. ‎Jack Ma’s ambitions to reshape the country’s state-led financial system have irritated many ‎officials for years.

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The group would be deprived of potentially profitable investments if it were forced to divest, ‎multiplying the pressure that is already on it to revamp its business structure and provide more ‎capital for its key consumer lending operations.‎‎

Divestments will also have a dramatic negative effect on the country’s fast-growing fintech ‎sector, which has recently been strengthening its businesses through acquisitions. ‎‎

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‎The Chinese government ‎has tightened its grip on anti competitive behavior in its thriving internet market. An ‎investigation was conducted last week by Authorities on Ant’s sister company Alibaba, and ‎ANT was directing to shake up its banking and other consumer finance operations.
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