China plans 'rectification' drive to divide Alibaba's empire - report
Beijing is reportedly accelerating plans to bring Jack Ma’s Ant Group more closely under its control as part of a “rectification” drive that would make it difficult for one of China’s richest men to fully rebuild his online empire.
With the Chinese government’s new plan, the Ant Group consumer lending unit and other parts of the group will be made into a new financial holding company and regulated by the People’s Bank of China, Bloomberg reported.
The PBoC issued a public rebuke of Ant at the weekend, calling on the company to be overhauled and accusing it of “turning a blind eye to compliance requirements”.
“The best solution is to break up Ant into a finance unit for its online lending, brokerage and insurance businesses that will be under full regulatory oversight, and a less regulated technology and data unit," a former regulator was quoted by the newspaper as saying.
Ma has long opposed heavy regulation from Beijing and recently accused China’s banks of having a “pawnshop mentality”.
Pan Gongsheng, PBoC deputy governor said on Sunday that Ant “must integrate its development into the overall plan of the country’s development”, and warned of big changes coming.
The new plan could significantly reduce how much investors think Ant is worth; the group was valued at up to $300bn prior to its IPO being scuppered in November.