On Monday, Alibaba-affiliated Ant Group released its corporate overhaul plan as a result of pressure from Chinese financial regulators. Ant Group promises to "set up a financial holding company to ensure our financial-related businesses are fully regulated."
In November 2020, its record-setting IPO set to list in Shanghai and Hong Kong was suspended two days before Ant Group was set to go public. In its prospectus, Ant Group said it "is not a financial institution … We are a technology company." Regulators begged to differ. The risks posed by Ant Group's unregulated online financial activities as well as parent company founder Jack Ma's blunt criticism of China's regulators are what caused the last-minute suspension, according to the Wall Street Journal.
Ant Group's Monday release says it will establish affiliate companies and conduct internal restructuring to ensure its popular online products — such as its personal credit reporting system and its microlending service "Jiebei" — are in compliance with regulations in their respective fields. "Under the guidance of financial regulators, Ant Group will spare no effort in implementing the rectification plan, ensuring that the operation and growth of our financial-related businesses are fully compliant," the release says.
On the same day, four of China's top financial regulation institutions summoned company executives again to "demand Ant Group pay proper attention to the severe problems in its financial activities and the seriousness of the rectification work," according to state news agency Xinhua.
The rectification plan was announced after news broke last week that Ant Group's parent company Alibaba had been fined a record $2.8 billion for monopolistic behavior.
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.