China’s central bank has issued one of the country’s largest fines against fintech giant Ant Group over various financial regulatory violations.
Ant Group, subsidiary of e-commerce company Alibaba, was issued a 7.12bn yuan fine ($985m) last Friday as the People’s Bank of China looks to take a stronger regulatory stance against large financial institutions in the country.
The central bank announced that Ant Group violated corporate governance, anti-money laundering and consumer protection requirements. The fine comes after years of back-and-forth between the Chinese fintech and the government over changing financial regulations.
The initial tension between Ant Group – more pertinently its Founder Jack Ma – and the Chinese government comes after the latter blocked the fintech’s $37bn Initial Public Offering (IPO) in November 2020, which would have made Ant Group the most valuable payments company in the world.
The Chinese government took issue with the stock market flotation as they believed “major issues” surrounded it and did not fall in line with the new financial regulations it was set to introduce.
This has in turn forced Ant Group to make corporate boardroom changes, most notably when its multi-billionaire Founder Ma ceased full control of the company last January, relinquishing his 50% stake in Ant to now only 6%.
Ma has been vocal against some of China’s regulations, labelling them as created by an “old people’s club” since the 2020 IPO was halted.
However, it appears that Ant has been working more proactively with the government over recent months, gaining approval to expand its consumer finance business, recognising its value to the country’s private sector which is going through an overhaul itself.
The Chinese central bank has clarified that financial institutions like Ant Group have rectified such issues and that recent fines may cool down as the bank looks to go through “normalised supervision” of its financial sector.
Ant Group stated it will “comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance”.
