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Sunday, September 26, 2021

Alibaba slides on report China plans to break up payment app

IDBS ART GALLERY

Shares of Chinese technology behemoth Alibaba have plummeted following news that its financial affiliate Ant Group is once again under investigation.

According to the Financial Times, regulators want to break up Alipay, China’s largest payments app with over a billion users.

According to the plan, a separate platform for the app’s profitable lending operation would be created.

It would be Beijing’s latest attempt to tighten its grip on large corporations.

According to the report, Ant could also be forced to hand over the user data that underpins its loan decisions to a new credit scoring firm that is partly state-owned.

In Hong Kong trade on Monday, Alibaba shares were down more than 5%.

The BBC’s request for information was not immediately responded to by Ant Group.

This would not be the first time that the Chinese government has targeted Ant Group.

A series of high-profile regulatory measures have hit Jack Ma’s business empire, co-founder of both Ant Group and Alibaba.

In October of last year, Chinese authorities began to show increased interest in Ant Group after Mr Ma criticised regulators, claiming that they were stifling innovation.

The following month, regulators thwarted Ant Group’s record $37 billion (£27 billion) share market debut.

Alibaba was fined a record $2.8 billion in April for monopoly concerns.

Simultaneously, Chinese regulators urged Ant to undergo a comprehensive business overhaul, including restructuring itself into a financial holding company.

It was also instructed to merge its two microloan services, Jiebei and Huabei, into the new finance firm.

According to the FT, Ant will not be the only Chinese online lender affected by the new rules.

In recent months, Chinese regulators have targeted other internet behemoths in a broad crackdown that has included issues of competition and privacy, as well as user data and cryptocurrencies.

SourceBBC
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