On Monday, Alibaba’s Hong Kong-listed shares increased by 3% on expectations that the years-long investigation into its financial unit Ant Group is nearing a conclusion.
Chinese authorities fined Ant Group 7.12 billion yuan ($985 million) on Friday, which may have put an end to Beijing’s campaign against homegrown tech firms.
The initial public offering of Ant Group was suspended in late 2020 due to listing restrictions. Alibaba was slammed with a $2.8 billion antitrust punishment in 2021, while the world’s largest food delivery company Meituan was fined 3.44 billion yuan the same year for breaking anti-monopoly laws. Didi, a major ride-hailing company, was fined 8.02 billion yuan in 2022 for breaking data security laws.
Chinese regulators said on Friday that the majority of unresolved issues relating to platform firms’ financial operations had been handled and that “normalized supervision” would be applied to the domestic digital sector.
Alibaba announced a significant restructure of its companies in March, which some observers said would be an indication that the Chinese government may be loosening its control over the domestic IT sector.
Oshadhi Kumarasiri, an equities analyst at LightStream Research, stated in a study that was posted on the research platform Smartkarma that “[regulators] have also emphasized the need for additional broader industry-wide regulations to effectively regulate the entire sector.”
“This suggests that the optimism regarding the end of regulatory scrutiny may be premature, as the new, broader regulations could be equally stringent,” said Kumarasiri.
The non-executive chairman of Partners Financial Holdings, Ronald Wan, stated that the growth rates of Ant Group and Alibaba will be “significantly restricted in the future.”
“Even though we have seen the good news of the settlement of the dispute on the regulatory front, it means that, in the future, Ant Group may be operating like a state-owned bank in China,” said Wan.