The world’s largest fintech company Ant Group has agreed on a restructuring plan with Chinese regulators under which the firm will be turned into a financial holding company, as per media reports.
The plan intends to categorize all of Ant’s businesses into the holding company, including its technology operations in areas like blockchain and food-delivery. As per the people familiar with the matter, an official announcement could come before the start of China’s Lunar New Year holiday.
The restructuring plan of Ant is said to be the first big step in what’s expected to be a lengthy process, as it includes drawing up detailed capital requirements and other guidelines for companies that span across various business lines. Meanwhile, both the Ant group and China’s central bank did not respond to the request for comment.
The company, an affiliate of eCommerce giant Alibaba Group which prepared to make its market debut in November. But, a speech made by its founder Jack Ma in October in which he criticized China’s regulatory system ignited a series of events that eventually led to the suspension of Ant’s $37 billion initial public offerings (IPO).
Last September, China issued new rules to regulate financial holding companies, in a move to prevent systematic risks to the nation’s financial sector, as several companies expanded blindly into the financial sector without any isolation mechanisms.
The Chinese regulators have been warning Ant and the wider technology industry that they target to impose rigid regulations, reversing the laissez-faire approach they took on the sector and internet finance platforms. Ant’s business activities include payment processing, consumer lending and insurance products distribution.