Ant Group, founded by Chinese billionaire Jack Ma, is mulling ways to restructure itself as a financial holding company overseen by China's central bank, reported The Wall Street Journal.
Reports stated that Chinese regulators have asked Ant Group to become a financial holding company. Ant, which is run by Jack Ma through Alibaba, has submitted an outline of a restructuring plan, sources close to the matter told the Journal.
Earlier, Ant group had announced plans for just one of its subsidiaries to become a financial holding. However, now, bringing the whole of Ant Group into one would lead to stricter regulations and is likely to affect the growth of the company.
Earlier, reports from China indicated that the Chinese government may be working on a plan to nationalize Jack Ma's Alibaba and the Ant Group. China's ruling Chinese Communist Party (CCP) has gone further ahead with the antitrust investigation into e-commerce giant Alibaba, I B Times reported.
Amid a crackdown on the Jack Ma-led Ant Group, reports suggest that the company's valuation may fall significantly. According to reports, as China undertakes fresh efforts to curb market concentration in the online payments market, the fintech giant might become worth less than 700 billion yuan ($108 billion). If the draft proposals are implemented, the company's Alipay service could reportedly have its value reduced by half.
The new rules come at a time when China is already taking steps to make anti-monopoly regulations tougher.
The rules to be reviewed are the latest in a slew of antitrust efforts that the government is taking. In fact, the draft rules unveiled on Wednesday had a mention of harsher regulatory measures against payment monopolies, the Global Times reported.
The People's Bank of China (PBC), the country's central bank, said in a statement that preventing financial risks in the payment arena is a key part of efforts to avoid systemic financial risks.
Ma himself had disappeared from the public eye for some time, soon after he called for reform in China's regulatory system. It would appear that the administration did not much care for his comparison of the country's financial watchdog to a “pawnshop” regulator. Soon after this, the Chinese government had reportedly begun a “coordinated regulatory crackdown” on the Alibaba Group.
Ma's recent reappearance in public via videoconferencing has alleviated the fears of many.
