Jubilee Post News & Views
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Ant Group Co. and Chinese regulators have agreed on a restructuring plan that will turn Jack Ma’s fintech giant into a financial holding company. It will make it subject to capital requirements similar to those for banks.
Ma’s appearance in a live-streamed video conference in January — after several months out of public view — has helped quell talk of worst-case scenarios for his business empire. The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas like blockchain and food delivery.
The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas like blockchain and food delivery, people familiar with the matter said. An official announcement on the overhaul could come before the start of China’s Lunar New Year holiday next week, the people said, asking not to be identified discussing private information.
Alibaba Group Holding Ltd., which owns about a third of Ant, erased losses in Hong Kong trading on Wednesday after Bloomberg reported the agreement. The stock closed with a 0.4% gain.
Some market participants had been speculating Ant might be forced to spin off portions of its business, which now looks unlikely, said Shujin Chen, Hong Kong-based head of China financial research at Jefferies Financial Group Inc.
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China only introduced its framework for financial holding companies in September and many of the specifics are still being ironed out. While the rules will eventually provide more regulatory clarity for Ant, they’ll almost certainly force the company to slow the torrid pace of expansion that has made it China’s dominant fintech player and one of the world’s most valuable startups.
