China wants to scale back Alibaba's power

Financial authorities crackdown on the fintech arm, Ant Group, after the freeze on the listing of records. Alibaba shares collapse on the stock market after antitrust investigations

Alibaba (credits, Alibaba) Beijing's tightening on Alibaba Group does not stop. After the announcement of the start of investigations into the operations of the ecommerce platform by the antitrust authorities, it is now above all Ant Group, the financial arm of the Chinese giant, to be targeted by the financial authorities who are asking the fintech company to deeply review or suspend some services to adapt to the new regulation regarding banking and lending activities.

Following the convening of Ant Group top management on December 26, the Chinese Central Bank, together with the China Banking and Insurance Regulatory Commission, the Stock Market Regulation Commission and the State Foreign Exchange Administration, formally asked the company to "rectify" its "illegal" activities in increasingly central sectors such as personal loans, insurance and wealth management.

In addition, regulators invited Ant to present the first a concrete plan is possible to meet the new regulations, as well as asking for greater transparency in the management of commercial transactions and the adaptation to permits for carrying out lending activities and for the management of customers' personal information. Overall, according to what we read on Bloomberg, the credit business and other digital financial services managed represent about 63% of turnover and have grown by 57% compared to last year.

In short, the main financial authorities of the country seem worried about the growth of the group in strategic sectors and ask that Ant resize its aims in the banking sector and return to function primarily as a payment service provider. Moreover, this line of action already seemed clear a month ago, when the same authorities decided to suspend the market debut of the Chinese giant, blocking a double record price of 37 billion dollars.

For its part, the company immediately made it known that it will start working to satisfy all the requests of the authorities. But with this new squeeze, the entire ecosystem built by Jack Ma is under attack. The ongoing antitrust investigation into Alibaba, accused of abusing its dominant position vis-à-vis sellers and other competitors, has plunged the stock into Hong Kong's marketplace.

And in an attempt, for now in vain, to raise the performance of the shares and reassure investors, the group has decided to increase the purchase volume of its own shares, taking it from 4 billion dollars to 10 billion dollars by 2022.

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Topics

Alibaba China Ecommerce Finance Fintech globalData.fldTopic = " Alibaba, China, Ecommerce, Finance, Fintech "

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