Chinese authorities are likely to announce a fine of at least 8 billion yuan (US$1.1 billion) on Ant Group as soon as Friday (Jul 7), sources with direct knowledge of the matter said, bringing an end to the fintech company’s years-long regulatory overhaul.
The People’s Bank of China (PBOC), which has been driving the revamp at Ant after its US$37 billion IPO was scuttled in late 2020, is expected to disclose the fine in the coming days, the sources told Reuters.
The penalty, which would be one of the largest ever fines for an internet company in the country, will help pave the way for the fintech firm to secure a financial holding company license, seek growth, and eventually, revive its plans for a stock market debut.
For the broader technology sector, an Ant fine would mark a key step towards the conclusion to China’s bruising crackdown on private enterprises that began with the scrapping of Ant’s IPO and which has subsequently wiped billions off the market value of several companies.
Ant and the PBOC did not immediately respond to a Reuters request for comment. The sources did not wish to be named as they were not authorised to speak to the media.
Founded by billionaire Jack Ma, Ant undertakes payment processing, consumer lending and insurance products distribution, among other businesses. In mid-2020 before its IPO was pulled, it was valued by some investors at more than US$300 billion.
Since April 2021, Ant has been formally undergoing a sweeping business restructuring, which includes turning itself into a financial holding company that would subject it to rules and capital requirements similar to those for banks.
Any announcement of the fine on Ant would come soon after China’s ruling Communist Party appointed central bank Deputy Governor Pan Gongsheng as the bank’s party secretary, a move two policy sources told Reuters would be a prelude to appointing him governor.
He is one of the main regulatory officials overseeing Ant’s revamp and has attended several meetings with the company about the fine and the revamp, according to the sources.
The National Financial Regulatory Administration (NFRA), a new government body under the State Council, is now the primary regulator to grant Ant the license, said the sources.
The NFRA did not immediately respond to a Reuters request for comment. The PBOC did not immediately respond to a request for comment on Pan’s role either
