BEIJING: Chinese fintech giant Ant Group has been fined almost US$1 billion for “illegal acts”, the country’s financial regulators said on Friday (Jul 7), adding that a longtime crackdown on tech firms was drawing to a close.
Ant operates Alipay, the world’s largest digital payments platform, which boasts hundreds of millions of monthly users in China and beyond.
It was one of the most prominent targets of a sweeping crackdown on the country’s booming tech sector.
“In view of the illegal and irregular acts by Ant Group and its affiliates in previous years… (the companies) have been fined 7.123 billion yuan (US$984 million)”, the China Securities Regulatory Commission (CSRC) said in a statement.
The penalty “included the confiscation of illegal income”, added the statement, which was also carried by the country’s central bank.
In its statement, the CSRC said that “at present, most of the outstanding problems in the financial business of platform enterprises have been rectified”.
“The work focus of the financial management department has shifted from promoting the centralised rectification of the financial business of platform companies to normalised supervision,” it said.
On Friday, Alibaba shares were up 3.44 percent in Hong Kong after reports the fine was coming, with analysts saying investors saw the punishment as a sign the crackdown was ending.
In a statement, Ant said it would “comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance”.
“Now the company has completed the related work on the rectification … In the future, Ant Group will uphold its mission and original aspiration,” the company said.
“We will continue to pursue innovation with a firm commitment to integrity, and continue to enhance our R&D capabilities to better serve and create greater value for the physical economy, especially for consumers and small businesses,” it added.
The fine related to “corporate governance, financial consumer protection, participation in business activities of banking and insurance institutions, payment and settlement business, fulfilment of anti-money laundering obligations, and development of fund sales business”, the CRSC statement said.
In recent years, Ant has expanded into offering loans, credit, investments and insurance to hundreds of millions of consumers and small businesses.
The government has sought to rein in runaway personal debt and chaotic lending in the private sector, and upstart Ant’s growing profile was widely viewed as a challenge to vested interests in the country’s state-dominated financial sphere.
The Alibaba affiliate was set to launch a record-shattering US$35 billion Hong Kong-Shanghai IPO in 2020 when the double listing was abruptly called off by regulators, citing non-compliance with new capital requirements.