Alibaba Said China The Country Was Planning To Crack Payment Apps.
Key Sentence:
- Shares of Chinese tech giant Alibaba fell sharply after a report that its financial firm Ant Group is back in control.
- According to the Financial Times, regulators want to take action against Alipay, China's largest payment app with more than one billion users.
The plan is to create a separate platform for applications to operate profitably in lending. This would be Beijing's final step in increasing its influence in big business. Ant could also be forced to turn over user data that supports its credit decisions to a new rating firm that will partly become state-owned, the report said.
Alibaba shares closed 4.2% lower in Hong Kong trading on Monday. This is not the first time the Ant group has targeted the Chinese government. The business empire of Jack Ma, co-founder of Ant Group and Alibaba, has been hit by several high-profile regulatory moves.
Chinese authorities began showing a growing interest in Ant Group in October after Ma criticized regulators for stifling innovation.
The following month the regulator won the Ant Group's initial trading record of $37 billion (£27 billion). Media caption How a little ant turned into a financial giant.
At the same time, Chinese regulators are urging Ant to undertake a significant corporate overhaul, including restructuring into a financial holding company. He was also asked to bring two of his microcredit services, Jiebei and Huabei, into the new financial firm.
The FT report said that ant would not be the only Chinese online lender to be affected by the new rules. In recent months, Chinese regulators have targeted other internet giants with large-scale repression that includes issues of competition and privacy and consumer data and cryptocurrencies.