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Jack Ma’s Ant plans major revamp in response to Chinese pressure
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Ant Group Co. is planning to turn itself into a financial holding company overseen by China’s central bank, responding to pressure to fall fully in line with financial regulations, according to people familiar with the matter.
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Chinese regulators recently told Ant, which is controlled by billionaire Jack Ma, to become a financial holding company in its entirety, subjecting it to more stringent capital requirements, the people said. Ant, in response, has submitted to authorities an outline of a restructuring plan, they said.
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The plan represents a significant turnaround by a digital-payments juggernaut that has in recent years tried to shed its image as a financial-services provider and fashion itself as an internet-technology company, which helped it command lofty valuations. Before its blockbuster initial public offering was called off last November, Ant had been on track to go public at a valuation north of $300 billion, well above the market capitalizations of the world’s biggest banks.
Designating Ant in its entirety as a financial holding company wasn’t something earlier envisioned by the company’s executives and stakeholders. In its listing prospectus last year, Ant said it intended for one of its subsidiaries to become a financial holding company and house its licensed financial businesses such as asset management and consumer lending. Doing this at the group level will subject Ant to a thicket of regulations similar to those that govern banks, and affect its growth and profitability.