Alibaba in hot water on China’s regulators probe over Ant Group
- 24th December 2020
- Posted by: Hakeem
- Category: Companies
The world’s second-largest economy, China, has recently launched an antitrust investigation into Asia’s leading e-commerce company, Alibaba, listed on the biggest stock market in the world.
In a report credited to Reuters, the e-Commerce juggernaut seems to be in hot water over its affiliate company, better known as Ant Group, as Chinese antitrust regulators plan to review if it was in anyway monopolistic.
Such a move by the Chinese regulators is seen by some market commentators as a huge hit to Jack Ma’s e-commerce and fintech empire.
Nairametrics, some weeks ago revealed how Ant Group’s world record-setting IPO, scheduled to hold in Hong Kong and Shanghai got suspended.
- At the time Ant’s group IPO got suspended, Alibaba, which has a majority stake of about 33% in Ant Group, saw its shares fall. It lost more than 5% in U.S. premarket trading.
- Ant Group’s Controller, Jack Ma; Executive Chairman, Eric Jing; and CEO, Simon Hu, were scrutinized by regulators in China, according to a statement seen from the China Securities Regulatory Commission.
The probe is part of a sudden and quick crackdown on monopolistic behaviour suspected to be in China’s booming internet ecosystem, and the latest setback for Jack Ma, the 56-year-old former school teacher, who founded Alibaba and became China’s richest man in the modern era.
What they are saying
In a strongly worded editorial, the ruling Communist Party’s People’s Daily revealed if “monopoly is tolerated, and companies are allowed to expand in a disorderly and barbarian manner, the industry won’t develop in a healthy, and sustainable way.”
Also, Chinese Financial regulators plan to meet with Alibaba’s Ant Group fintech affiliate in the coming days, according to a separate statement by the People’s Bank of China, released today.
The meeting would “guide Ant Group to implement financial supervision, fair competition and protect the legitimate rights and interests of consumers,” the statement said.
Ant said it had received a notice from regulators and would “comply with all regulatory requirements.”
What you should know
Ant Group, formerly known as Ant Financial and Alipay, is an affiliate company of the popularly known e-commerce company, Alibaba.
- Ant Group remains the world’s most valuable Fintech company, and most valuable unicorn company, with a target valuation of over US$280 billion.
- The group owns China’s largest digital payment platform, Alipay, which serves over one billion users and 80 million merchants, with total payment volume (TPV) transactions reaching RMB118 trillion in June 2020.