China has imposed a sweeping restructuring on Jack Ma’s Ant Group, the fintech conglomerate whose record $37 billion IPO was derailed by regulators in November, underscoring Beijing’s determination to rein in its internet giants.
The overhaul, in the works for several months, includes Ant turning itself into a financial holding firm, a move expected to curb its profitability and valuation by curtailing some of its freewheeling businesses.
It comes two days after Ma’s Alibaba Group Holding Ltd, of which Ant is an affiliate, was hit with a record $2.75 billion antitrust penalty as China tightens controls on the booming “platform economy”.
The overhaul, directed by China’s central bank, subjects Ant to tougher regulatory oversight and capital requirements, and requires it to cut links between its hugely popular payments app Alipay and its other businesses – which had been viewed as a big advantage due to Alipay’s vast trove of customer data.
This restructure effectively splits Ant into a few independent businesses to stop Alipay from being a super app capable of controlling the day to day lives of the Chinese people,” said Lightstream Research analyst Oshadhi Kumarasiri, who publishes on the Smartkamra platform.
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