Jack Ma is not a fan of regulation. Unfortunately for him, now that he doesn’t have time to say this, he’ll get it.
Regulators have made five demands on Ant to get back to their payment roots, protect personal data in the lending business, set up a financial holding company, improve corporate governance and exercise more discipline in the securities and wealth management business.
If all of Ant’s companies were placed under a financial holding company, regulators would oversee all of their activities and rule out the potential for regulatory arbitrage, according to one of the people familiar with the plan.
And when that’s all done, it can likely go public again. It can’t want to go back, of course, but it can’t have a choice either.
When PBOC Governor Yi Gang was asked during a virtual meeting of the World Economic Forum on Tuesday whether Ant would revive his IPO, if laws and regulations are followed, he said, “You will have the result …”.
If the overhaul is done by Ant, the company’s sales and earnings growth could be severely limited. Ant may also need to raise significant capital to meet regulatory requirements, and the company’s high valuation based on its profitability and growth potential could also take a hit.
Jack Ma’s Ant is planning a major overhaul in response to Chinese pressure [WSJ]