April 12, 2024

Chinese authorities announced a nearly $1 billion fine on fintech firm Ant Group on Friday, nearly three years after regulators halted plans for a record-breaking public offering that kicked off intense government scrutiny of tech companies period.

fine Announce The decision by China’s top securities regulator is seen as a sign that authorities are wrapping up investigations into tech companies, ending a period of strict regulation for the industry. Officials said earlier this year that they would start deregulating technology companies. Ant’s sister company, e-commerce giant Alibaba, was hit with a record $2.8 billion antitrust fine in 2020, as was a $1.2 billion fine on ride-sharing service Didi Chuxing.

Regulators fined Ant Financial and its subsidiaries 7.1 billion yuan ($985 million) and ordered the company to shut down its medical expense crowdfunding platform Xiangxiangbao. The regulator also announced a shift in focus, as “most of the outstanding problems in the tech giant’s financial operations have been rectified”.

Ant Group said in a statement statement It has “actively carried out business rectification since 2020” and will “seriously and sincerely abide by the penalty clause”.

Founded in 2014, Ant Financial is one of the largest online fintech companies in the world. Chinese authorities halted Ant Group’s blockbuster initial public offering in November 2020, days after Ant Financial planned to raise about $34 billion in Hong Kong and Shanghai in what was expected to be the world’s largest IPO

A month later, Ant Financial was ordered by Chinese regulators to overhaul its operations. The People’s Bank of China, the country’s central bank, explain Ant Financial was “indifferent” to the law at the time. The central bank asked the company to increase transparency, strengthen corporate governance and set up a holding company.

The investigation into Ant Financial comes after its founder, billionaire entrepreneur Jack Ma, publicly criticized Chinese regulators in 2020 for stifling innovation and being too cautious. Subsequently, Jack Ma, China’s most famous tech entrepreneur, disappeared from public view.

Earlier this year, Ant Group said Ma would relinquish control of the company. Around the same time, China’s central bank said regulatory action against big tech companies was nearing completion. Ma’s recent reappearance in mainland China after spending much of his time overseas has sparked speculation that he could return to a more important role at Alibaba. Last month, in a personnel shakeup, two longtime executives who helped Ma start Alibaba were named to head the company.

Alibaba Group said in March it would become a holding company and restructure the group into six distinct business units with their own chief executive and board of directors. The decision could help the units successfully complete their initial public offerings and assuage Beijing’s concerns about the concentration of power and influence at the tech giant.

Ant’s valuation was slashed from $235 billion to about $63.8 billion before Chinese authorities halted the IPO in November 2020. According to Bloomberg.

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