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Jack Ma’s Ant Group has launched a share buyback plan that values the fintech giant at nearly 70 per cent below its proposed initial public offering price in 2020.
The company offered to repurchase up to $6bn in shares at a valuation of $78.5bn, a day after Chinese financial regulators fined the company nearly $1bn to conclude a years-long campaign of scrutiny.
Chinese financial regulators on Friday slapped Ant with an Rmb7.1bn fine ($984mn). Their “rectification” campaign forced Ant to transfer half of its profitable lending business to outside investors, while assets at its flagship money market fund have halved from their peak. The government has also sought control over its vast trove of user data.
Ant’s restructuring began in November 2020 after Ma criticised regulators and the country’s state-owned banks in a speech just days before the fintech group’s planned listing.
Official backlash at Ma’s speech kicked off Beijing’s campaign to rein in the influence of corporate titans. Ma mostly disappeared from public view and moved to Japan for a period.
“Most of the outstanding problems for financial platforms have been rectified,” the central bank and securities regulator said in a statement on Friday, noting their focus had now shifted to “normally supervising” groups such as Ant and Tencent.
Ant was fined for a number of violations, with its Alipay digital payments unit penalised nearly Rmb3bn for clearing, due diligence and consumer protection lapses.
“We will comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance,” Ant said in a statement on Friday.
Tencent’s Tenpay was also fined nearly Rmb3bn, with the payments group accused of “jeopardising the prudent operations of the payment industry”, according to a central bank statement.
Earlier this year Ma gave up control of Ant, which he split out of Alibaba in 2011. His retreat helped take worst-case scenarios for him and Ant off the table, according to two people close to financial regulators.
A probe Beijing launched into Ant and officials connected to its listing attempt and shareholding structure was also concluded without finding anything significantly detrimental to Ma, the people said.
Meanwhile, in the years since Beijing launched its tech crackdown, officials have grown increasingly concerned that hobbling China’s fintech giants at home would also constrain their global operations. “They’ve done much better at expanding abroad than state-owned banks,” said one person close to financial regulators.
Ma is now making more frequent trips to mainland China and giving low-key appearances at Alibaba, where he has returned to help pilot a turnround for the ecommerce giant. Alibaba’s shares rose nearly 6 per cent in New York trading on Friday.
Ant will at some point next year be able to restart efforts to list publicly, but regulators did not clarify the status of its credit scoring venture, which is set to be controlled by state-owned groups, nor a licence to operate as a financial holding company.
“Only after these tasks are completed can Ant truly be back to the track of normal business,” said Dong Ximiao, a financial regulation expert at Merchants Union Consumer Finance.
Ant said its two controlling shareholders — investment groups mostly comprised of Ant executives — would not sell to the buyback. The company said it would allocate repurchased stock to its employee incentive programme.
With additional reporting from Nian Liu in Beijing and Eleanor Olcott in Hong Kong
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