Beijing make the company Ant Group, a subsidiary of Alibaba, to abandon Alipay payment service, and create a separate application for credit. The new project will be partly owned by the government and deal a new blow to the firm’s independence Jack Ma, writes Financial Times.
At present, Alipay enjoys more than a billion people. Revenue from service is a huge part of the profit Ant Group – in the first half of 2020 had 39 per cent of it. In addition, last year with the help of the application has been granted ten percent of all consumer loans in the country.
Chinese regulators have ordered finteh giant separate server part two of its credit projects, Huabei and Jiebei, from other financial services, as well as to attract new shareholders. The server part of the site is responsible for storing and processing data. According to the government plan, Huabei and Jiebei will be merged into a single application that will be partly owned by the state. This means that Beijing will be at the disposal of the user data underlying the lending decisions. “The government believes that the large technology companies got the monopoly power of control over the data [user] – said a source Financial Times, close to the Chinese financial regulators -. It wants to put an end to”
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However, Ant Group managed to reach a compromise with the authorities on the issue of control over the new service. Local authorities of Zhejiang Province, the birthplace of the company, made concessions and motivated local state-owned enterprises to become partners in preparing a loan project. Several of these firms will own a controlling stake. “Given the mutual trust between Ant and Zhejiang, finteh group will have a big impact on how the new joint venture – said a former official of the People’s Bank of China -. But the new structure also ensures that Ant will listen to the voice of the party, when it It comes to making important decisions. ” According to a source from the company staff, team owner of the company, Jack Ma, will be “in charge” of the project.
Alibaba’s shares fell 5.9 percent in Hong Kong trading on Monday after the publication of the article Financial Times. At time of writing the news one share worth 160.8 dollar. The new rules will apply to all online lenders China. In the summer of the Central Bank informed the industry that lending decisions should be made not on the basis of its own data companies, and using data from a single company responsible for assessing the creditworthiness of customers.
The success finteh giant Ant Group causes his business more and more problems. Last year, the authorities canceled the IPO of the company in the amount of 34.5 billion dollars after the identified non-compliance with the listing requirements (including securities in the stock exchange list). This was followed by months of repression against the Chinese technology firms – Beijing introduced a number of rules relating to antitrust policy and personal data protection. In April this year the government also fined Alibaba a record amount – about $ 2.8 billion – because of alleged abuse of its market dominance