The fintech company’s years-long regulatory revamp will likely come to an end when Chinese regulators impose a punishment of at least 8 billion yuan ($1.1 billion) on Ant Group, according to sources with direct knowledge of the situation.
According to the sources, the People’s Bank of China (PBOC), which has been driving Ant’s transformation since its $37 billion IPO was abandoned in late 2020, is anticipated to announce the penalties soon.
The punishment, which would rank among the highest ever assessed against an online company in the nation, would help the fintech startup get the financial holding company license it needs to pursue expansion and, eventually, resurrect its aspirations to list on the stock market.
An Ant penalty would be a significant step towards the end of China’s brutal assault on private firms, which started with the cancellation of Ant’s IPO and has since reduced the market value of several companies by billions.
Ant, a company founded by billionaire Jack Ma, engages in a variety of enterprises, including the marketing of insurance goods and the processing of payments. Before its IPO was canceled in the middle of 2020, several investors valued it at more than $300 billion.
Ant has been formally undertaking a significant corporate reorganization since April 2021. Part of this restructuring involves converting Ant into a financial holding company, which would subject it to regulations and capital requirements comparable to those for banks.
The major regulator currently responsible for approving Ant’s license is the National Financial Regulatory Administration, a brand-new agency under the State Council.