Ant mulls folding financial operations into holding company to appease regulators: reports
Jack Ma’s beleaguered Ant Group is considering folding most of its financial businesses into a holding company that would be regulated like a bank, according to media reports.
The fintech giant was looking to move any unit that would require a financial license into the holding company, Bloomberg reported, citing sources.
It could include its wealth management arm, insurance distribution businesses and the minority-owned MYbank online leader as per regulators’ request, but the fate of Alipay was still unclear, according to a Reuters report that also cited sources.
The plans were still under discussion and subject to change, the reports said.
Ant’s US$37 billion initial public offering in Shanghai and Hong Kong, set to be the world’s largest, was abruptly halted last month by Chinese regulators. That was seen as a step to rein in Ma’s business empire, after he publicly criticized the country’s regulators in October.
On Sunday, the central bank said it had asked Ant to revamp its lending and other consumer finance operations.
The move would slow Ant’s growth drastically, with the valuation of its non-payment businesses slashed by as much as three quarters, according to Francis Chan, a Bloomberg Intelligence analyst cited in the news agency’s report.
Kenny Wan, a financial analyst of Everbright Sun Hung Kai, echoed Chan’s view, and said Ant’s future valuation would be based on its position between an internet company and a traditional bank.
The valuation of other internet companies, such as Tencent and JD, would also be affected, he said.
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