ANT GROUP TO REORGANIZE, FACE STIFF CONTROLS: CHINA REGULATORS
Ant Group, one of the world's biggest financial technology companies, has been ordered by Chinese authorities to reorganize its operations, a move that will put it under more direct government oversight and likely reduce its value, experts say.
The reorganization will mean Ant Group - the financial arm of Alibaba, China's largest online retailer - will become a financial holding company. That will make its operations more like those of a bank and put it under the authority of national regulators, Andreas Landwehr reported for Deutsche Presse-Agentur (dpa).
It would also mean that Ant Group will need to boost its liquidity, meaning it will have less cash on hand.
The plan was announced by Pan Gongsheng, the deputy head of China's central bank, on Monday after a meeting with bank regulators and the heads of the company.
Speaking on national TV, Pan said that Ant Group must end "unfair competition practices" and "actively reduce" liquidity risks. In the future, the loans it makes will have to use the government's credit and data protection guidelines.
Ant Group offers a range of financial services, from payments by smartphone, quick loans, wealth management, and insurance. But Pan said the goal was now to end "illegal" activity and to set better controls for its finances and risk management.