Ant Group, the online subsidiary of Chinese e-commerce giant Alibaba, on Monday announced a comprehensive overhaul of its business in response to demands from the Chinese government, which is moving fast to limit the power of the country’s internet giants.
The campaign in Beijing saw the corporate empire of Jack Ma, co-founder of Alibaba, and Ant’s controlling shareholder, as an early big target. On Saturday, China’s antitrust authority fined Alibaba $ 2.8 billion for abusing its dominance in digital retail – a record amount for violations of the country’s antimonopoly law.
As part of what both Ant Group and Chinese officials call a “correction plan”, the company said Monday it would apply to set up as a financial holding company, which would provide closer oversight and requirements that it could raise more money. possession which he could otherwise have borrowed or used.
Ant also said it would change the way it collects and uses personal information to improve data security and prevent misuse. It is said that it will improve the management of corporate enterprises to better comply with the rules on fair competition.
“Under the guidance of financial regulators, Ant Group will make no effort to implement the redress plan,” the company said in a statement. “By using the correction as an opportunity, Ant Group strengthens our commitment to serve consumers, small businesses and the real economy.”
Chinese officials forced Ant to push out its first public offering last year, just days before the shares were expected to launch. A month later, regulators ordered Ant to rectify a shortfall in failures in its business, which includes a range of financial services, from payments to credit, offered through its Alipay app.
Alipay’s user base of over 700 million people in China gives Ant a major influence within the country’s financial system.
China said for the first time last September that companies that own two or more financial companies must register as financial holding companies and, among other things, should be under government supervision. In a newsletter at the time, an official from China’s central bank named Ant as one of several companies that would probably have to restructure under the new rules.
The aim, according to officials, is to monitor systematic risks that have arisen as more non-financial companies have “blindly” entered the financial industry.