The shock suspension of the Ant Group Co (螞蟻集團) US$35 billion initial public offering (IPO) is just the beginning of a renewed campaign by China to rein in the fintech empire controlled by Jack Ma (馬雲).
Authorities are now setting their sights on Ant’s biggest source of revenue: its credit platforms that funnel loans from banks and other financial institutions to millions of consumers across China, people familiar with the matter said.
The China Banking and Insurance Regulatory Commission (CBIRC) plans to discourage lenders from using Ant’s platforms and has already asked some to ensure their portfolios are compliant with stringent draft regulations announced on Monday, said the people, who asked not to be identified as they were discussing private information.
Photo: AFP
The proposed measures, which call for platform operators to provide at least 30 percent of the funding for loans, would render many of Ant’s existing transactions non-compliant. The company currently keeps about 2 percent of loans on its own balance sheet, with the rest funded by third parties, or packaged as securities and sold on.
The full scope of China’s plans for Ant is unclear and it is possible that lenders could continue to work with the company once it complies with regulators’ requests.
Any suggestion that banks would stop using its platforms is “unsubstantiated,” Ant said in a response to questions from Bloomberg.
“Ant will continue to support bank partners to make independent credit decisions, and leverage Ant’s technology platforms to serve consumers and small businesses,” it said.
The CBIRC did not immediately respond to a request for comment.
“From the perspective of regulators and investors, they all need Ant to provide a better disclosure on the colending business,” said Chen Shujin (陳姝瑾), Hong Kong-based head of China financial research at Jefferies Financial Group Inc (富瑞金融). “Ant needs to be aligned with regulations going forward and show that its business model can help lower borrowing costs for the economy rather than raising them with some kind of monopoly.”
China halted Ant’s IPO on Tuesday after summoning Ma to a meeting on Monday to outline an array of concerns and new regulations.
The Chinese government is tightening its controls on Ant and other fast-growing financial firms after years of allowing them to operate without the capital and leverage requirements imposed on banks.
Authorities have not yet provided much detail about what prompted the turnabout on the IPO, beyond saying that it could not go ahead because of a “significant change” in the regulatory environment.
The halt came after Ma criticized the nation’s financial system and questioned global regulatory models at a conference last month, calling banks “pawn shops.”
China is still a “youth” and needs more innovation to build an ecosystem for the healthy development of local industry, Ma said.
NATIONAL SECURITY: The Chinese influencer shared multiple videos on social media in which she claimed Taiwan is a part of China and supported its annexation Freedom of speech does not allow comments by Chinese residents in Taiwan that compromise national security or social stability, the nation’s top officials said yesterday, after the National Immigration Agency (NIA) revoked the residency permit of a Chinese influencer who published videos advocating China annexing Taiwan by force. Taiwan welcomes all foreigners to settle here and make families so long as they “love the land and people of Taiwan,” Premier Cho Jung-tai (卓榮泰) told lawmakers during a plenary session at the Legislative Yuan in Taipei. The public power of the government must be asserted when necessary and the Ministry of
CROSSED A LINE: While entertainers working in China have made pro-China statements before, this time it seriously affected the nation’s security and interests, a source said The Mainland Affairs Council (MAC) late on Saturday night condemned the comments of Taiwanese entertainers who reposted Chinese statements denigrating Taiwan’s sovereignty. The nation’s cross-strait affairs authority issued the statement after several Taiwanese entertainers, including Patty Hou (侯佩岑), Ouyang Nana (歐陽娜娜) and Michelle Chen (陳妍希), on Friday and Saturday shared on their respective Sina Weibo (微博) accounts a post by state broadcaster China Central Television. The post showed an image of a map of Taiwan along with the five stars of the Chinese flag, and the message: “Taiwan is never a country. It never was and never will be.” The post followed remarks
Proposed amendments would forbid the use of all personal electronic devices during school hours in high schools and below, starting from the next school year in August, the Ministry of Education said on Monday. The Regulations on the Use of Mobile Devices at Educational Facilities up to High Schools (高級中等以下學校校園行動載具使用原則) state that mobile devices — defined as mobile phones, laptops, tablets, smartwatches or other wearables — should be turned off at school. The changes would stipulate that use of such devices during class is forbidden, and the devices should be handed to a teacher or the school for safekeeping. The amendments also say
CONSISTENT COMMITMENT: The American Institute in Taiwan director said that the US would expand investment and trade relationships to make both nations more prosperous The US would not abandon its commitment to Taiwan, and would make Taiwan safer, stronger and more prosperous, American Institute in Taiwan Director Raymond Greene said. “The US’ commitment to Taiwan has been consistent over many administrations and over many years, and we will not abandon our commitment to Taiwan, including our opposition to any attempt to use force or coercion to change Taiwan’s status,” he said in an exclusive interview with the Liberty Times (the sister newspaper of the Taipei Times) on Friday last week, which was published in the Chinese-language newspaper yesterday. The US would double down on its efforts
RSS