- Alibaba Group Holding Limited BABA fintech affiliate Ant Group is likely for a lower penalty as regulators brace to end a years-long industry crackdown.
- Regulators now propose a penalty of 5 billion yuan ($728 million), down from the prior fine of over $1 billion, Reuters reports.
- Chinese authorities, notably the People's Bank of China (PBOC), which has been driving a business overhaul at Ant after quashing its $37 billion IPO in 2020, looks to announce the fine in the coming months.
- Also Read: Alibaba Chip Unit And Ant Group's Payment Service Unite To Launch Chips For Payments
- The penalty will likely ease the fintech firm's path to secure a long-awaited financial holding company license, seek growth, and eventually make its market debut.
- The authorities also look to reconsider their charges against Ant. China now cites financial risks and operating particular businesses without proper licenses as the triggers for the fine.
- Earlier, the penalty was likely to be focused on alleged violations related to "disorderly expansion of capital."
- Ant underwent a sweeping business overhaul since April 2021, which includes turning itself into a financial holding firm, subject to rules and capital requirements similar to those for banks.
- Ma, in January, agreed to relinquish control of Ant as part of the revamp.
- The cut in the fine following the recent return of Ant's founder Jack Ma after his overseas tenure of more than a year since the IPO fiasco reflects the softening sentiments of Beijing toward the private sector.
- Price Action: BABA shares traded higher by 2.68% at $99.00 premarket on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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