China is forcing Ant Group to restructure its business

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It should be recalled that in November last year, Chinese regulators disrupted the record-breaking ($ 37 billion) public offering of Ant Group shares due to concerns about the group’s financial model. The group’s business restructuring, in turn, is part of a broader initiative by the Chinese authorities to drive the country’s fast-growing technology platforms. In addition, Ant Group was fined $ 2.8 billion by Alibaba on Friday for antitrust concerns. Interestingly, after the announcement of the fine, Alibaba’s share price rose by more than 8%, as investors felt it marked the end of the investigation.

The People’s Bank-led restructuring is subject to Ant Group’s tighter regulatory oversight and minimum capital adequacy requirements. Ant Group is China’s largest payment provider with more than 730 million monthly user groups on the Alipay digital payment platform.

The People’s Bank of China points out that, according to a “comprehensive and workable restructuring plan”, Ant Group will also reduce the “inappropriate” link between Alipay and the group’s credit card and consumer lending services. The consumer data available to the company is considered to be one of the main advantages over competitors. Ant Group has also agreed to set up a credit reporting company that will strengthen the protection of personal data and prevent data misuse.

Chinese regulators appear to be ready to take a tougher stance on technology companies as the industry continues to grow. Last month, the Chinese National Market Regulatory Authority announced that it had fined 12 companies for 10 antitrust deals. Among the companies were Tencent, Baidu and Didi Chuxing, one of China’s largest technology companies.

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