China’s crackdown on Jack Ma’s empire is far from over: Regulators across the country have ordered Ma-founded Alibaba subsidiary Ant Group to downsize. In particular, they ordered the company to “go back to its origins” as a payment provider. Ant Group started out as Alipay, which grew to become China’s largest digital payments platform, but eventually expanded to offer investment and savings accounts, as well as loan services. , insurance and wealth management.
Pan Gongsheng, vice governor of the central bank of China, called these services “illegal” and said the company should “strictly rectify” these activities. As The Guardian noted, these services are the most profitable and dynamic divisions of the group.
In November, Chinese regulators blocked Ant’s scheduled IPO in Hong Kong and Shanghai, which is expected to raise $ 34 billion. The authorities also introduced new bills to oversee the data collection activities of tech companies, along with other rules they say are aimed at protecting consumers. And just days ago, regulators opened an investigation into “Alibaba’s alleged monopoly behavior.”
Ma’s businesses appear to have become a target after he called Chinese banks state “pawn shops” for granting unnecessary loans at a finance summit in Shanghai in October. According to Bloomberg, its businesses have been in crisis since then and its executives have even formed a task force to deal with government watchdogs on a daily basis.