FinTech: Ant Group Agrees With Regulators To Become A Financial Holding Company
Jack Ma-controlled Ant Group will put all its businesses under an umbrella holding company.
The Ant Group, which had to shelve its $35 billion IPO in November following a scrap with China’s regulators, has agreed with them to restructure its operations. According to Bloomberg, Ant will now house all its operations, including the tech-heavy food delivery and blockchain, in a financial holding company.
This company will be subject to capital requirements akin to banks.
Announcement next week?
Anonymous sources told Bloomberg that Ant could make an official announcement of the proposed overhaul by next week, before the start of China’s Lunar New Year holiday.
Though Ant will gain from regulatory compliance, there is likely to be a period of consolidation and slowing growth.
This may impact its valuation. Its still-born IPO would have raised nearly $35 billion, valuing it at $313 billion.
Sources told Bloomberg that an IPO was still on the table. However, it would likely take its time to pass through regulatory scrutiny given the recent changes.
Jack Ma still under a cloud
Jack Ma was supposedly underground for many months after his ill-fated remarks irked regulators present at a forum in Shanghai in late October.
In his speech, Ma flayed Chinese regulators and state-owned banks for their “pawnshop” mentality. He also chastised the country’s regulatory system because it “stifled business innovation.”
Much to the relief of the stock markets, Ma reappeared in January to participate in the online ceremony of the annual Rural Teacher Initiative event on January 20.
However, all is not well it seems on Ma’s standing with the Chinese authorities. On Tuesday, the Chinese state media published a list of its pioneering tech giants, but the absence of billionaire Jack Ma from the list was glaring.
However, Ali Baba’s co-founder archrival Pony M found mention and was saluted for “rewriting the mobile age.”
Related Story: Jack Ma is Back! Alibaba Stock Soars 8.52% In Hong Kong
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