Jakarta, CNN Indonesia –
Business empire Jack Ma received two crushing blows, in line with the tightening of Government oversight China towards affiliates Alibaba Group.
Most recently, Chinese regulators ordered Alipay’s Alibaba Group affiliate, Ant Group, to overhaul its operations into a holding finance company overseen by the central bank.
The directive was issued on Monday (12/4), just days after Alibaba was fined 18 billion yuan, or the equivalent of Rp.40.49 trillion for allegedly violating anti-monopoly rules.
The long-awaited announcement means Alibaba’s other affiliates will also have to follow the same rules of the game that conventional Chinese banks impose.
Ant Group’s financial moves are likely to be closely watched by the Xi Jinping administration. The fintech giant must comply with new rules regarding how much cash companies have and how fast the business is allowed to grow.
Quoting CNN Business, the reshuffle marks a dramatic change from the company’s position in just the last five months.
At that time, the company was predicted to break the record for the largest IPO in the world. Unfortunately, the plan fell apart after the Chinese communist government summoned Jack Ma and canceled the plan.
People’s Bank of China Deputy Governor Pan Gongsheng said Ant Group is facing serious problems in its financial activities.
In a statement on Monday (13/4), he stressed how serious the reshuffle was. He also said company executives had been called in to speak with financial regulators.
The meeting will be the second summons for Ant Group executives, after in December 2020 they appeared before Chinese authorities.
At that time, Pan said that the Ant Group, which was accused by officials of violating the rules, would be asked to overhaul its operations. Sure enough, now that plan is starting to materialize.
In response, Alibaba Group Co-Founder and Executive Vice Chairman Joe Tsai told investors the company would not appeal the biggest fine in history.
“With this sentencing decision, we have received good guidance on some specific issues regarding anti-monopoly law,” Tsai said.
He also promised Alibaba Group to stop the practice of this exclusive agreement. “We are happy we can forget about this problem,” he added.
(wel / a)
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