Two months ago, global investors around the world were getting ready to accept a windfall from what would have been the world's largest public offering. However, currently, the returns on the hundreds of millions of dollars invested are in jeopardy.
Further insights between China Central bank and Jack Ma's Ant tussle
China had ordered Ant to reexamine its fintech businesses starting from wealth management to consumer credit lending and insurance. This also includes the returns to its roots as payments services. Although China's central bank statement was reserved with its specifics, it nevertheless caused serious threats to the growth and development of the lucrative dealings of billionaire Jack Ma's finance online empire.
Jack Ma's seems to be close to being asked by regulators to break up the business. It is implied by the same said regulators that Jack Ma 'understands the necessity of overhauling the business'. He has been asked to come up with timetables and a plan as soon as possible. The Central Bank states that Ant used its dominance to exclude rivals and in the process, hurt the interest of hundreds of consumers. Ant in its response said that it will set up a special team to come up with plans in order to comply with the regulator's demands. It promised to maintain business operations for users. It also gave its word not to inflate the prices for consumers and financial partners while upgrading its risk controls.
Inventors and Analyst observations
The view by some idealists is that Beijing might be making an example out of Ma's Ant, the largest fintech. The belief is that past crackdowns of this nature have dealt short-term blows to companies leaving them mostly unscathed. A good example will be the social media giant Tencent Holdings Ltd., in a campaign to combat gaming addiction amongst children in 2018. The company shares took a hit but recovered quickly to all-time highs.
Ant's affiliate, Ali Baba Group Holding Ltd. recently regained confidence after short runs sell-offs following accusations by authorities starting from uniquely squeezing-off merchants to allowing fake products on its e-commerce platforms. Others believe that the worst-case scenario would be for Ant to forgo its money management, credit, and insurance businesses and halting its operations in units that service half a billion people.