The People’s Bank of China (PBOC) announced that financial regulators will fine Ant Group and its subsidiaries a total of 7.12 billion yuan (about 984 million US dollars). In response to this, the corporation’s management announced a plan to buy back shares in order to replenish funds. Therefore, Ant Group wants to motivate the staff and give various investors the opportunity to leave against the background of the actions of the financial authorities.
The company said it had offered all of its shareholders to buy back up to 7.6% of its stake at a price that matches the group’s valuation of about 567.1 billion yuan (about $78 billion), CNBC reported.
“The repurchased shares will be included in Ant Group’s employee incentive plans to attract talent. The tender offer will also provide investors in the company with an opportunity to obtain liquidity.
Ant Group’s main shareholders, Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Equity Investment Partnership, voluntarily opted out of the purchase, the company added.
Ant Group, founded by billionaire Jack Ma, owns Alipay, one of the world’s largest mobile payment systems. The billionaire himself left the management of the company, his share was reduced from 50.52% to 6.2%.
At the same time, from 2021, Ant Group embarked on a large-scale corporate restructuring, which was designed to turn the corporation into a financial holding company subject to much the same requirements for holding and raising capital as banks.
Experts believe that a large fine, which includes, among other things, “confiscation of illegal income”, will allow Ant to close all problems with the Central Bank of China and finally obtain the license required for a financial participation.
The country’s central bank fined several other big tech companies along with Ant, including Tencent Holdings Tenpay. After that, NBK said that by doing so, the regulator solved the key “serious problems of the financial business”, making it possible to move “from focusing on specific firms to general regulation of the industry.”
In the market, these actions and statements are seen as the beginning of a new era: from now on, the brutal crackdown on private companies in China, which began with the cancellation of Ant Group’s IPO at the end of 2020 and subsequently depreciated the market. value of several other companies, is expected to end.
Author:
Ekaterina Alipova
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
