By
Chimamanda U. Martha
January 19th, 2024
The latest round of examination on Ant Group, led by China’s National Audit Office was the most extensive yet even though the reason for the latest round of inspection, was unclear.
Chinese authorities have instructed the country’s state-owned firms and banks to begin a new round of investigations on their financial exposure and other ties to Ant Group Co owned by billionaire Jack Ma.
According to reports, several Chinese regulators, including the banking watchdog, recently advised banks under their jurisdiction to closely assess all exposure they had to Ant, including subsidiaries and shareholders, up to January.
The latest round of examination on Ant Group, led by China’s National Audit Office was the most extensive yet even though the reason for the latest round of inspection, was unclear. An anonymous source, close to the events unfolding, described it as a wide-range look into all dealings with Ant Group as according to the source, the Chinese state-owned firms, and the other institutions were tasked to report findings back as soon as possible.
It is also unclear whether the recent scrutiny will lead to any actions or conclusions from Chinese regulators. Any attempt to get a comment from the China Banking and Insurance Regulatory Commission and the top auditor proved futile.
Jack Ma’s financial empire has been under the radar of the Chinese government since the latter stages of 2020 as his comments on how traditional banks should move away from their “pawnshop operating model,” left Chinese regulators outraged. The billionaire business mogul also questioned if international financial regulations were fit for the Chinese economy, subsequently leading d to the abrupt suspension of Ant Group’s IPO in November 2020.
Ant Group’s thwarted IPO plans in 2020 by Chinese authorities was the biggest initial public offering in history by Ant, as Beijing intensified its efforts to crackdown on cryptos in the region. Authorities have since handed out billions of dollars in antitrust fines in a bid to neutralize the domination of a few heavyweights.
Alibaba Group was handed a $2.8 billion antitrust fine by China’s State Administration for Market Regulation in April 2021 after an investigation was launched in December 2020 into its dealings. The findings of the investigation revealed that the company’s “choice of two” behavior “eliminated and restricted competition” in China’s eCommerce market and “hindered the free circulation of commodity services and resource elements”, the State Administration for Market Regulation stated.
The State Administration for Market Regulation also added that Alibaba’s actions “affected the innovation and development of the platform economy”. Alibaba published a statement the same day it was slammed with the fine, saying it “accepts the penalty with sincerity and will assure its compliance with determination.” It also expressed gratitude for the company’s merchants, consumers, partners, and shareholders’ trust and patience.