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- Ant Group has submitted a plan to restructure itself as a financial holding company, sources familiar with the matter told The Wall Street Journal.
- This means it would be overseen by China’s central bank and would face stricter regulations.
- Chinese regulators ordered the restructure, the sources said.
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Ant Group, the financial-services company founded by Chinese billionaire Jack Ma, plans to restructure itself as a financial holding company overseen by China’s central bank, The Wall Street Journal reported Wednesday.
One person familiar with the plan told the Journal that the move would give regulators oversight of all Ant’s activities. Ma’s business empire, which he controls through the conglomerate Alibaba, has come under increasing scrutiny from Beijing in recent months.
Ant had previously announced plans for just one of its subsidiaries to become a financial holding company. Turning the whole of Ant into one would mean it faced stricter regulations, similar to those that the country’s banks have to follow, and would affect its growth.
Chinese regulators told the company to become a financial holding company, prompting Ant to draw up the plan, people familiar with the matter told The Journal. The plan could be finalized by mid-February, the people said.
This comes months after Ant’s initial public offering, set to be the biggest ever, was suspended in Shanghai and Hong Kong following a meeting between Ma and Chinese regulators.
In late December, China's central bank and three financial watchdogs said they would urge Ant to implement stricter financial regulations for its banking services.
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The country had introduced regulations that clamped down on Ant's lending business after Ma made incendiary comments about China's banking rules. He reportedly dismissed the global financial regulations used by China as "an old people's club" and said that "we can't use yesterday's methods to regulate the future."
Chinese regulators also launched an antitrust investigation into Ant Group's parent company Alibaba in December.
Amid the rising scrutiny of his companies, Yahoo Finance reported in early January that Ma hadn't been seen publicly in more than two months, leading to weeks of speculation about his whereabouts.
He reemerged on January 20 in a 50-second video-conference clip.