Ant Group in Zhejiang: accused of "unfair competition"
Photo: dpa / CHINATOPIX
Alibaba's fintech division, Ant Group, has been in trouble with Chinese financial regulators for months.
The has now announced stricter requirements for the financial services provider of Alibaba founder Jack Ma.
Before a possible new attempt at an IPO, the Ant Group had to be fundamentally rebuilt, decided the Chinese central bank.
Specifically, Ant Group must become a financial holding.
The supervisors particularly criticize the "improper" link between the payment service provider AliPay, the business with virtual credit cards ("Jiebei") and the Huabei consumer credit division.
These are now to be capped with a »comprehensive and implementable restructuring plan«.
As deputy central bank chief Pan Gongsheng announced according to the state television, the Ant Group must in future eliminate "unfair competition" in its services.
Ant has also been asked to address its debt and product risks, as well as the liquidity risk of its key fund products, and downsize its huge Yu'eBao money market fund, it said.
Alibaba was fined 2.3 billion euros
For billionaire Jack Ma, the new editions come at an inopportune time.
Only at the weekend, the authorities imposed a billion-dollar fine on its online trading platform Alibaba.
The Chinese Amazon rival is said to pay the equivalent of 2.3 billion euros for violating antitrust law.
The world's largest online trading platform has used its dominant position to force dealers to offer their goods exclusively through Alibaba, the market regulator justified the move.
It is the Chinese antitrust authorities' highest penalty to date against an Internet company.
The problems for Alibaba began in the fall when Jack Ma criticized the tax authorities for holding back innovation shortly before the planned double listing of the Ant Group.
After that, the authorities canceled the debut on the floor in Shanghai and Hong Kong for a short time.
It should have been the biggest IPO of all time.
Now the company must also accept the stricter supervision of the authorities and stop "illegal" activities in credit, insurance and asset management.
The actions of the regulators are part of a greater scrutiny of the growing financial platforms on the Internet, where hidden risks are feared.
CEO Jack Ma disappeared from the scene for almost three months after the failed IPO of Ant.
In a speech at the time, he criticized the supervisory authorities in China.
There has been much speculation about his whereabouts.
In January, he finally spoke up in a 50-second video from his foundation.
According to experts, the new requirements will significantly reduce the company's value.
It was valued at $ 280 billion prior to the planned IPO.
Ant Group is the biggest player in the Chinese fintech sector.
His mobile payment service Alipay has a billion users and more, which means more than fifty percent market share.
In second place is Tencent's Wechat.
In China, mobile payment with the cell phone is already the rule, so that little cash is paid.
The equivalent of several trillion euros flow through the payment services every year.
apr / dpa / Reuters