BEIJING (Reuters) – China’s financial regulators urged the Ant Group on Sunday to outline a concrete plan as soon as possible to meet regulatory demands and fully understand the seriousness of the “rectification” work that needs to be done.
Central bank, banking, securities and foreign exchange regulators urged Ant to rectify illegal financial activities, including in its credit, insurance and wealth management businesses, and to regulate its credit rating businesses to protect personal information. Governor of the People’s Bank of China (PBOC) Pan Gongsheng said the day after he met with representatives of the fintech group.
Ant said in a statement that he will establish a “rectification” working group and fully implement regulatory requirements.
The state-backed Economic Daily said in a comment that Ant must serve people’s needs and economic development, assuming effective corporate social responsibility.
Chinese regulators abruptly suspended Ant’s planned initial public offering of $ 37 billion, which had become the largest in the world, just two days before its shares began trading in Shanghai and Hong Kong last month.
On Thursday, officials said they launched an antitrust investigation against the Alibaba Group and that they would summon Ant, the latest blow to billionaire Jack Ma’s fintech and e-commerce empire.
New demands from PBOC, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the State Exchange Administration also include that Ant be more transparent about its third-party payment transactions and do not lead to unfair competition , and that its configuration of holding companies complies with the law to ensure capital adequacy, said Pan.
China’s Annual Central Economic Work Conference, a meeting of key leaders and policymakers to chart the course of the economy in 2021, promised this month to strengthen anti-monopoly efforts and contain “disorderly capital expansion”.
Pan said Ant should step up its risk management and maintain the continuity of its normal business operations and services.
During the meeting, regulators pointed to Ant’s problems, including its poor corporate governance, defiance of regulatory demands, illegal regulatory arbitrage, the use of its market advantage to eliminate competitors and harm consumers’ legal interests, he said.
(Reporting by Stella Qiu, Cheng Leng, Yilei Sun and Ryan Woo; Editing by William Mallard)