Chinese regulators have ordered Jack Ma’s online financial titan Ant Group Co. to return to its roots as a payments provider. And threaten to curb development in its most profitable businesses, customer lending and wealth management.
Ant Group to return to being a payments provider
The central bank summoned Ant executives over the weekend and told them to “correct” the company’s lending, insurance and wealth management services, the People’s Bank of China said in a statement Sunday.
Central bank does not directly call for breakup
While the central bank did not directly call for the company to be broken up, it stressed that Ant “understands the need to overhaul its business” and must submit a timetable as soon as possible.
The collection of decrees symbolizes a critical risk to the growth of Ma’s online financial empire, which has grown rapidly over the past 17 years from a PayPal-like operation to a full suite of providers.
Ant Group was on the verge of going public
Before regulators intervened, Ant was on the verge of an initial public offering that would have potentially valued the company at more than $300 billion, with current backers including Carlyle Group Inc. and Silver Lake Management LLC.
The Hangzhou-based agency now wants to move forward with organizing a separate money holding company to ensure it has sufficient capital and shield personal non-public knowledge, the central financial institution stated.
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