Ant Group Hit with Record Fine: China Imposes Nearly $1 Billion Penalty on Jack Ma’s Company
China’s top financial regulators have imposed a fine of approximately 7.1 billion yuan ($994 million) on Ant Group, the fintech company founded by billionaire Jack Ma. The fine was imposed for violating rules related to consumer protection and corporate governance. The regulators, including the China Securities Regulatory Commission, the People’s Bank of China, and the National Financial Regulatory Administration, also found that Ant Group had broken rules in areas such as banking and insurance business activities, payments, anti-money laundering, and fund sales.
In response, Ant Group stated that it would earnestly comply with the terms of the penalty and continue to enhance its compliance governance. Ant Group is an affiliate of e-commerce giant Alibaba, which was also founded by Jack Ma.
Following the announcement of the fine, shares in Alibaba experienced a sharp rise as investors speculated that the penalties might mark the end of the regulatory crackdown that began in November 2020 when Ant Group’s IPO was suspended just before its launch. This crackdown was part of a broader campaign by the Chinese government to rein in the power of private enterprises, including Alibaba. In April 2021, Alibaba received a record-breaking fine of 18.2 billion yuan ($2.5 billion) for monopolistic behavior.
The People’s Bank of China’s Communist Party boss, Guo Shuqing, stated in January that the government’s regulatory campaign was essentially over as they aimed to support economic growth, job creation, and China’s international competitiveness. In line with the regulatory changes, Jack Ma stepped down from controlling Ant Group in January, after the company underwent business restructuring to address regulatory concerns.
Furthermore, China’s financial regulators also announced a fine of nearly 3 billion yuan ($415 million) for Tenpay, Tencent’s online payment platform, as per information posted on the People’s Bank of China’s website on Friday.
