Ant Group, the Chinese fintech giant controlled by Alibaba cofounder Jack Ma, will undergo a major restructuring that will put it under much tighter regulatory controls, China’s central bank said today.
The announcement comes five months after Beijing abruptly halted the company’s $37 billion IPO—which would have been the world’s largest—over concerns about the growth of unregulated financial-technology services in the country and the growing power of China’s tech sector more broadly. Under the restructuring plan, Ant Group will apply to become a financial holding company to ensure that it is in compliance with new requirements that were laid out by regulators in December.
An Ant Group spokesperson confirmed the restructuring plan with Fast Company and referred us to a statement in which it outlined the following changes:
- Ant Group’s payment business “will serve consumers and SMEs by focusing on micro-payments and bringing them convenience,” which Ant describes as “returning to its origins.”
- The company will “set up a personal credit reporting company and apply for a personal credit reporting license.”
- It vows to “strengthen the protection of personal information, and effectively prevent the abuse of data.”
- Ant subsidiaries Jiebei and Huabei “will be operated by our consumer finance company which will be operated in compliance with relevant laws and regulations.”
- The company will “strengthen consumer rights protection as well as suitability management of financial consumers.”
- It also plans to further enhance its “corporate governance, adhere to fair competition rules, bring related-party transactions into line, strengthen risk prevention and control, create a fair market environment, and further strengthen our corporate social responsibility commitments.”
Ant Group’s Alipay is the world’s largest digital payments platform.
News of the restructuring plan came just two days after Chinese officials hit Alibaba Group with a record $2.8 billion fine over antitrust violations. U.S.-listed shares of Alibaba were up more than 7% in early trading on Monday after the company released a lengthy statement saying, “We accept the penalty with sincerity and will ensure our compliance with determination.”