Chinese authorities on Friday announced a 7.12 billion yuan ($984 million or R$4.8 billion) fine for group of ants, completion of multi-year fintech regulatory reviewwhich is a key step towards completing the crackdown on the country’s internet sector.

The fine imposed by China’s central bank responsible for reviewing Ant following the cancellation of its initial public offering (IPO) at the end of 2020 is 7.1 billion yuan. In addition, the company was required to terminate its Xianghubao crowdfunding health service and compensate affected users.

The fine was one of the largest ever imposed on an internet company in China. Ant and its subsidiaries have been found to be violating corporate governance and consumer financial protection laws, as well as engaging in commercial activities that banking and insurance institutions are supposed to carry out, according to China’s central bank.

Financial regulators have said the focus will be on improving the standardized oversight of platform companies in the financial sector, putting all financial activities under strict scrutiny. This action aims to strengthen industry regulation and enforce established rules.

In response, Ant Group said it had completed the fix work requested by the authorities. The company has committed to serious compliance with the terms of the fine and to continue to improve compliance management. In 2021, the group shut down Xianghubao, a service that instigated illegal activities.

Ant Group by Alibaba Group

Founded by billionaire Jack Ma, Ant Group is known for using the Alipay mobile payment app and is active in consumer finance, insurance product distribution and other related activities.

Since April 2021, the company has been going through a comprehensive restructuring process, aiming to transform into a financial holding. This transformation will see Ant Group subject to bank regulations and capital requirements, demonstrating the need for greater compliance and transparency in the industry.

By imposing a fine on the billionaire, China is showing its determination to introduce stricter regulation of the Internet sector and ensure consumer protection, as well as achieve greater financial stability.

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Source: Reuters.

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