China’s central bank accused Ant Group, the Chinese fintech giant, of “turning a blind eye” to regulatory compliance issues and ordering it to “rectify” its operations, in the latest government campaign against Jack Ma’s empire online.
Ant responded to Sunday’s reprimand with a statement saying she had “immediately” started to develop plans and timetables to meet the demands made by the People’s Bank of China. The group added that it would “significantly” improve compliance by overhauling its operations.
Last Thursday, China’s State Administration for Market Regulation announced that it had launched a antitrust investigation in Mr. Ma’s e-commerce platform, Alibaba, the country’s largest technology company, for possible monopoly practices. On the same day, financial regulators led by the PBoC said in a brief statement that they would “oversee and guide” Ant on issues related to fair competition and consumer protection.
Representatives of the PBoC and Ants met on Saturday and Sunday, with the central bank posting a rare public rebuke on its website. He published an interview transcript with Vice Governor Pan Gongsheng, who accused Ant of “having little legal knowledge and of turning a blind eye to compliance requirements.”
Mr Pan then called on Ant to take a series of steps, including a revamp of its highly profitable consumer lending and asset securitization business, which raised concerns about credit risks.
The incident is Beijing’s latest move to oust the once powerful industry leader. Regulators last month canceled the initial public offering of $ 37 billion Ant planned, which would have been the largest in the world.
The dramatic intervention to stop Ant’s IPO came just days after Mr. Ma, China’s richest man, said in a high-profile speech in Shanghai that the state-owned banks of the countries had a conservative “pawnshop” mentality that prevented credit from flowing to small businesses and individuals.
Mr. Ma’s comments were viewed as particularly brazen as he spoke at an event attended by senior regulators and also addressed by the vice president. Wang qishan, who stressed the need to guard against financial risks.
Since the end of its IPO, Ant has taken a number of steps to demonstrate its willingness to take control of many of its operations, particularly in the growing consumer credit industry.
Last week, the group suspended its popular online filing business that helped regional banks obtain financing from across the country – a possible violation of regulations prohibiting lenders from operating beyond their home province. .
A few days later, the group announced that it would reduce loan quotas for some young borrowers so that they could develop “more rational” consumption habits. Jane Zhang, a Shanghai-based marketing assistant, said her borrowing quota had dropped 90% to less than Rmb2,000 ($ 306).
“I once was able to rely on Jiebei to buy a Gucci bag,” Ms. Zhang said, referring to Ant’s online loan application. “Now it’s just barely enough to afford a budget smartphone.”