Financial regulators in China are moving to curb the influence of Jack Ma‘s Ant Group by telling it to switch focus back to its mainstay payments business while fixing issues in personal lending, wealth management and more, The Wall Street Journal (WSJ) reports.
The People’s Bank of China criticized Ant on Sunday (Dec. 27) for how it treated competitors and consumers and also seemingly disregarded regulations. There weren’t many more specifics than that.
The Chinese central bank’s statement came after it had met with representatives of Ant and regulatory officials from the country’s securities, banking and foreign exchange sectors, presented as a Q&A with PBOC vice governor Pan Gongsheng.
Ant said it appreciated the bank’s statements and would work toward complying, including putting together a timetable and plan of action, WSJ writes.
The regulations will mean that Ant, one of the most valuable startups in the world, will have to rein in its inroads into lucrative areas of business. The diminished scale could affect Ant’s profit potential and market valuation if it attempts to go public again.
Ant’s much-anticipated double IPO was nixed earlier this year by the government. The IPO, which would have been listed on both the Hong Kong and Shanghai markets and was set to raise $34 billion, would have been the biggest in the world up to that point.
The government, and particularly President Xi Jinping himself, pulled it after Ma gave a speech criticizing government regulations, PYMNTS writes. Ma had already clashed with regulators before, with the regulators wary of Ma’s growing power in the markets. His statement in October was that the government was leveling too much regulation at businesses, which left the government “infuriated” and led Xi to pull the plug on the IPO.
In the wake of the IPO’s collapse, Ant made a move to curb borrowing limits for some users in Huabei, intending to promote more “rational” spending habits.