China Continues Criticism of Ma Yun... "Ant Group Fails to Comply with Regulations"

Joint Meeting with Financial Authorities Restricts Loan and Other Revenue-Generating Activities

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Chinese authorities have publicly criticized Jack Ma's Ant Group for failing to comply with regulations. This is an unusual move that occurred just one day after summoning the management of Ant Group, the core fintech affiliate of Alibaba Group, for a meeting.

According to major foreign media on the 27th (local time), four agencies?the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange?are reported to have summoned Ant Group's management for a scheduled meeting the day before.

A scheduled meeting refers to a government agency calling in supervisory officials or individuals to publicly reprimand them and convey demands, essentially serving as a form of 'disciplinary action.'

This is the second scheduled meeting between Chinese authorities and Ant Group, following the first on the 2nd of last month.

Pan Gongsheng, Deputy Governor of the People's Bank of China, strongly criticized, saying, "Alibaba lacks the will to comply with laws and disregards regulatory authorities in pursuit of profits."

Additionally, Deputy Governor Pan urged during this scheduled meeting that Alibaba must return to its core business of payments and strictly rectify activities involving the sale of financial products such as loans and insurance that violate regulations.

Ant Group operates Alipay, the most widely used electronic payment service in China, with over 1 billion annual users. However, Alipay itself does not generate profits; instead, Ant Group covers most of its revenue through microloans and various investment product sales linked to Alipay.

This is interpreted as a demand to reduce fintech business areas such as loans and investment product sales, which is expected to directly impact Ant Group's profitability in the future.

The Chinese government has recently shown its intention to rein in Alibaba, which has grown into a giant internet conglomerate.

At the Central Economic Work Conference held this month, the Chinese Communist Party leadership announced a new policy direction to strengthen antitrust supervision and prevent reckless capital expansion, which is widely interpreted as targeting China's giant internet companies like Alibaba and Tencent.

Previously, the day after the first meeting on November 3rd, Chinese authorities took the unprecedented step of abruptly canceling Ant Group's initial public offering (IPO) just two days before its scheduled listing.

Earlier this month, Ant Group was fined for violating antitrust regulations by conducting mergers and acquisitions without reporting to authorities, and it was also disclosed that a separate antitrust investigation had begun regarding issues related to coercive practices stemming from monopolistic positions.

This content was produced with the assistance of AI translation services.