HONG KONG — Chinese governments have arranged Ant Group, the world’s biggest financial technology firm, to rectify its own companies and comply with all regulatory demands involving increased scrutiny of anti-monopoly clinics in the nation’s internet sector.
The People’s Bank of China, the nation’s central bank, summoned Ant executives Saturday and arranged them to invent a rectification program and an implementation schedule of its organization, including its credit, insurance, and wealth management solutions, the authorities said in a statement Sunday.
The announcement stated that Ant Group lacked a solid governance mechanism, defied regulatory compliance demands, and participated in regulatory arbitrage. Also, it stated that the firm used its market place to exclude opponents and harm the rights and interests of customers.
The requests from regulators can restrict Ant Group’s growth and toss its profitable finance companies into disarray.
Ant Group, which began as an obligations solution for Alibaba’s e-commerce stage Taobao, has since expanded to provide investment and insurance products to its countless millions of consumers in mainland China. Jack Ma, the creator of Alibaba and Ant Group, is among China’s wealthiest and most notable entrepreneurs.
They also stated that Ant Group must go back to its obligations origins, improve transparency around trades, and prohibit unfair contest while enhancing corporate governance and ensuring that it complies with regulatory requirements because of its businesses.
Ant Group said in a statement Sunday that it might comply with all regulatory requirements and improve risk control and management, and a working group could be put up to create the essential rectifications.
“We value financial regulators’ advice and aid,” the announcement said. “The rectification is a chance to get Ant Group to fortify the basis for our company to grow with complete compliance, and also to keep on focusing on innovating for societal good and functioning small companies.”
The evaluation of Ant Group and Alibaba comes as China closely assesses the impact of the nation’s internet sector.
Last month, China published draft regulations to clamp down on anti-competitive clinics in the market, like signing exclusive arrangements with retailers and using subsidies to squeeze out rivals.
Last Tuesday, authorities met with executives of Alibaba and five other leading Chinese internet firms and warned them to not abuse their dominance to push out competitors using exclusive contracts, predatory pricing, and other strategies, according to a statement by the State Administration of Market Regulation.