China fines Ant Group $985 million and marks an end to three years of crackdown

We know that the Ant Group which is led by Alibaba’s founder and former CEO Jack Ma was under scrutiny since the last three years because of unfair trade practices and many allegations that were levied against them by the Chinese regulators. Due to that reason, the growth of Ant Group along with Alibaba and its subsidiaries had stalled and it was seen as a big blot on the technology firms in China. However, we have seen that a lot of things have happened to the Ant Group in recent times which could well be a part of the negotiations that took place between the Chinese regulators and Alibaba.

As part of these actions, the Ant Group was divided into six different entities with Alibaba becoming a separate entity and their logistics arm also becoming a separate entity. At that time, Alibaba CEO said that they are doing this to “unlock investor potential”. However, the scenario can be clearly seen now that the company has been fined $985 million by the Chinese authorities. It is also worth noting that the investors are happy with this fine because this will mean that the scrutiny of technology firms might finally come to an end with this fine. Regulators also said that “most of the prominent problems in the financial business of technology giants have been rectified.”

On this, Ant Group said that it “has been conducting business rectification proactively since 2020” and would “comply with the terms of the penalty in all earnestness and sincerity.” It is to be noted that the Ant Group’s valuation also took a steep dive because of the intervention by Chinese regulators ahead of its IPO in November 2020. Its value was estimated to be $235 billion before the crackdown was announced and it quickly fell to $63.8 billion but it has gone back up since then. China’s central bank also said that “it was nearly finished with its regulatory campaign on Big Tech” and signs are such that Jack Ma could return to a bigger role in Alibaba once again after his year-long hiatus outside of China ever since this crackdown.

Leave a Comment