[NTD Times, Beijing time, May 08, 2023]The so-called “institutional reform” launched by the Beijing authorities this year involves the restructuring of the financial regulatory system. Affected by this, Ant Group’s process of applying for a financial license was blocked.
The Wall Street Journal reported on May 6, citing sources familiar with the matter, that at the end of February this year, in the so-called “Institutional Reform Plan” passed by the Second Plenary Session of the 20th Central Committee of the Communist Party of China, the plan involving the reform of “state institutions” mainly focused on technology, finance, reforms in areas such as data, and will establish the “State Administration of Financial Supervision” and the “National Data Bureau.”
In the past more than a year, Ant Group has been committed to formally transforming into a financial company fully under the national financial supervision, but its process of applying for relevant licenses has been hindered by the reorganization of the national financial supervision system, because Ant Group The license needs to be approved by the newly established agency.
The process could take months to complete, the people familiar with the matter said. Until then, Ant Group’s application for a financial license will remain on the backlog. It may not be until the second half of this year or later that Ant Group’s application acceptance will make progress.
The report also mentioned that before obtaining a financial license, Ant Group may be fined first, and the related “fine amount and basis are still under discussion.”
Ant Group, a subsidiary of Alibaba Group, was once the most influential mobile payment provider in China and one of the most valuable unlisted companies in the world. At the beginning of November 2020, Ant Group planned to go public in Hong Kong and Shanghai and conduct a large-scale IPO transaction, but was suddenly stopped by the Chinese government, and was ordered by the regulator to carry out comprehensive “rectification” from the end of 2020.
Public opinion generally believes that what happened to Ant Group is the result of its actual controller, Jack Ma, the founder of Alibaba, publicly criticizing the CCP’s financial regulators.
Later, Jack Ma announced that he would give up his actual controlling stake in Ant Group, and Ant Group also stated with trepidation that the company will carry out “rectification” in various aspects such as business model and corporate governance in accordance with official requirements. The results of this rectification still need to wait for the CCP government to issue an order. The last step in the overall procedure is to obtain a license to establish a financial holding company.
Of course, before that, Ant Group will inevitably have to accept official penalties and pay a fine that is estimated to be not low. If Ant Group can pass the “rectification” and obtain a license to become a formal financial holding company as it wishes, the company will be subject to supervision similar to that of Chinese banks and other financial institutions.
(Editor in charge: Li Ming)