Una billion dollar fine can that be good news? For AntGroup, the fintech company of the Chinese e-commerce giant Alibaba, the answer is yes. The Central Bank of China has fined Ant 7.123 billion Yuan, equal to 984 million dollars for “illegal actsie irregular” committed in recent years, especially in the banking and consumer protection sectors.
From the failed IPO to the maxi fine
The decision of the People's Bank of China (Pboc) ends a lengthy regulatory investigation by Chinese regulators, which began after that Ant's Ipo, expected to be the largest in history and worth $37 billion, foundered in November 2020 following harsh comments by Jack Ma against China's banking and financial system. Just a few months earlier Ant Group, a subsidiary of Alibaba and the parent company of Alipay, the world's largest digital payment platform by number of users, had reached valuations of up to $300 billion. In 2021 the group started a restructuring process company, establishing the transformation into a financial holding company which would subject it to capital requirements and rules similar to those of banks.
Because the fine is good news
For Reuters, despite being one of the highest fines ever imposed on an internet company in the country, the fine “will help pave the way for fintech society to obtain a financial holding license, seek growth and ultimately revive its plans for a debut on the stock market“, reads the rumors. In short, a billion dollars to bury the hatchet. Not only that, according to the news agency, it could also represent a key step towards the end of China's crackdown on private enterprise.
And the market seems to agree. Not surprisingly, pending the official announcement, Alibaba's share in Hong Kong rose by 3,44%.
