China hits a group of ants with a $985 million fine

Chinese authorities announced a nearly $1 billion fine on fintech firm Ant Group on Friday, nearly three years after regulators halted the company’s plan for a record-breaking public offering that led to a period of intense government scrutiny of tech companies.

the fine announce By China’s top securities regulator, it is seen as a sign that authorities are winding down investigations into tech companies, ushering in a period of tighter regulation of the industry. This year, officials said they would begin to ease oversight of tech companies. 2020’s crackdown on Ant was followed by a record $2.8 billion antitrust fine for e-commerce giant Alibaba, Ant’s sister company, and a $1.2 billion fine for Didi, a ride-sharing service.

Regulators fined Ant and its subsidiaries 7.1 billion renminbi ($985 million) and ordered the company to shut down its crowdfunding platform for medical costs, Xianghubao. The regulators also announced a shift in their focus, because “most of the outstanding problems in the financial business of the tech giants have been rectified.”

The group of ants in A statement It has been “proactively conducting business rectification since 2020” and will “comply with the sanction terms with all seriousness and sincerity”.

Founded in 2014, Ant is one of the largest online financial technology companies in the world. In November 2020, Chinese authorities halted Ant’s flagship IPO days before it was set to raise an estimated $34 billion in Hong Kong and Shanghai in what was expected to be the world’s largest IPO.

A month later, Chinese regulators ordered Ant to revamp its business. People’s Bank of China, the country’s central bank, He said At the time when you were “indifferent” to the law. The central bank ordered the company to improve transparency, strengthen corporate governance, and set up a holding company.

The investigation into Ant began after its founder and billionaire businessman, Jack Ma, publicly criticized Chinese regulators in 2020 for stifling innovation and being overly cautious. After that, Mr. Ma, the most prominent Chinese tech entrepreneur, disappeared from the public eye.

Ant Group said this year that Mr. Ma will give up control of the company. Around the same time, China’s central bank said it was nearing completion of its regulatory crackdown on Big Tech. Mr. Ma’s recent appearance in China after spending most of his time abroad has fueled speculation that he may return to a bigger role at Alibaba. Last month, in a sea change, two longtime executives who helped Mr. Ma at Alibaba were put in charge of the company.

Alibaba Group said in March that it would become a holding company and restructure the group into six different business units with its own CEO and board of directors. This decision could help units complete successful IPOs and ease Beijing’s concern about the tech giant’s concentration of power and influence.

The estimated value of Ant has been cut to $63.8 billion from $235 billion before the Chinese authorities halted the IPO in November 2020. According to Bloomberg.