PBOC orders Ant Group to restructure
CHINA’S Ant Group, a financial affiliate of ecommerce giant Alibaba Group Holding, will restructure as a financial holding company, the central bank said yesterday.
The restructuring means Ant will be subject to tougher regulatory oversight and capital requirements.
Under a “comprehensive and feasible restructuring plan,” Ant would cut the “improper” linkage between payments service AliPay, virtual credit card business Huabei and consumer loan unit Jiebei, the People’s Bank of China said after it and other financial regulators held talks with Ant yesterday.
The central bank also asked Ant to break its “monopoly on information and strictly comply with the requirements of credit information business regulation.”
The company was ordered to improve corporate governance and “rectify illegal financial activities in credit, insurance and wealth management,” the central bank said.
It has also asked Ant to control its leverage and product risks, and control the liquidity risk of its flagship fund products and to “actively lower” the size of its massive Yu’eBao money market fund.
In a statement on its official WeChat social media account, Ant said: “Under the guidance of financial regulators, Ant Group will spare no effort in implementing the rectification plan, ensuring that the operation and growth of our financial-related businesses are fully compliant.”
As part of the restructuring, Ant said it would set up a personal credit reporting company, which will comply with relevant laws and strengthen the protection of personal information, and effectively prevent the abuse of data.
Ant will also fold its two flagship lending businesses Jiebei and Huabei into its consumer finance company. “Returning to its origin, our payment business will serve consumers and SMEs by focusing on micropayments and bringing them convenience,” the company said.
The recent talk echoes China’s anti-monopoly efforts and aims to promote the healthy and sustainable development of the platform economy, Pan Gongsheng, deputy head of the central bank said in a Q&A statement yesterday.
The measures “set an example” for financial regulation of the platform economy,” the Economic Daily newspaper said.
China has been making efforts to mitigate financial risks and maintain a healthy financial market in recent years.