Financial regulators imposed a 7.12 billion yuan ($984.1 million) fine on Ant Group, an affiliated company of Alibaba Group Holding Ltd, on Friday for violations of laws on corporate governance, consumer rights and business activities.
Analysts said the action ends a yearslong regulatory overhaul of the fintech company. The special rectification work on most of the prominent problems concerning platform companies' financial activities has been completed, the China Securities Regulatory Commission, the People's Bank of China, and the National Financial Regulatory Administration said in a statement published on their official websites.
The focus of financial regulatory authorities will shift from intensive and special rectifications of platform companies' financial businesses to normal supervision, the regulators said.
The PBOC, the country's central bank, said on Friday that Tencent Holdings' Tenpay was slapped with a fine of 2.99 billion yuan.
In addition, in response to the problems found in the past law enforcement inspections, the financial authorities imposed administrative penalties on the Postal Savings Bank of China, Ping An Bank and PICC Property and Casualty Company.
Ant Group said that it accepted the decision by financial regulatory authorities to impose the administrative penalty, and will comply sincerely with the terms of the penalty.
Under the guidance of financial regulatory authorities, Ant has been conducting business rectification since 2020. The company said it has now completed the rectification work, adding it will further enhance its compliance governance.
Ant said it will also continue to enhance its research and development capabilities to better serve and create greater value for the real economy, especially for consumers and small businesses.
Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, said the latest moves indicate that China's supervision of platform companies' financial activities will now normalize. More targeted efforts are expected to guide the platform companies toward better compliance, promoting healthy development of the sector and better serving the real economy, he added.
Almost two years of special rectification work on the platform economy has come to an end, and the country will now encourage the standardized and healthy development of platform enterprises, Pan said.
He added the move may help pave the way for Ant to secure a financial holding company license, and revive its plans for an initial public offering on the stock market.
Since April 2021, Ant has been undergoing a sweeping business restructuring, which includes turning itself into a financial holding company whose financial activities are put under stricter regulatory supervision. Its IPO plan was halted in late 2020 with regulators citing a change in the regulatory environment to ensure market fairness.
The major revamp of Ant includes disconnecting its payment app Alipay from sister credit products like Huabei and Jiebei, ending its monopoly on information collection, and improving management of liquidity risks of important fund products.
Noting Ant's rectification work has made achievements in meeting regulatory requirements, Wang Pengbo, a senior analyst at market consultancy Botong Analysys, said supervision is expected to become more regular.
Wang said that support will be extended to help platform companies play a bigger role in bolstering economic growth, job creation and global competition.
The regulatory environment will help stabilize market expectations and enable the financial sector to further serve the real economy, Wang added.
In January, Ant announced a series of adjustments to the voting rights of Ant's major shareholders, saying no shareholder, alone or jointly with other parties, will have control over the company. The changes were part of its broader push to further optimize corporate governance.