June 22, 2024

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Alibaba’s stock drops in response to a report. China intends to deconstruct payment apps

Alibaba’s stock has plummeted after a report that its financial affiliate, Ant Group, is once again under investigation.

According to the Financial Times, regulators aim to break up Alipay, China’s largest payment app with over a billion users.

As per the idea, a separate platform for the app’s profitable loan activity would be built.

It would be Beijing’s latest attempt to tighten its hold over large corporations.

According to the article, Ant could be required to hand over the user data that drives its loan choices to a new credit scoring agency that is partially state-owned.

Alibaba’s stock fell 4.2 percent in Hong Kong trading on Monday.

This would not be the first time the Chinese government has attacked Ant Group.

A series of high-profile regulatory actions have been imposed on Jack Ma’s corporate empire, which includes Ant Group and Alibaba.

After Mr. Ma criticised regulators, implying that they were suffocating innovation, Chinese authorities began to show more interest in the Ant Group in October of last year.

Regulators thwarted Ant Group’s record $37 billion (£27 billion) share market debut the following month.

Alibaba was fined a record $2.8 billion in April due to monopolistic concerns.

At the same time, Chinese regulators demanded that Ant undergo a major business restructuring, including reorganising itself as a financial holding company.

It was also told to merge Jiebei and Huabei, its two microloan services, into the new finance firm.

According to the Financial Times, Ant will not be the only Chinese online lender harmed by the new restrictions.

Other internet giants have been targeted by Chinese regulators in a wide-ranging crackdown that has included competition and privacy issues, as well as user data and cryptocurrencies, in recent months.