The headquarters of Ant Group Co. in Hangzhou, China, on Wednesday, January 20, 2021.
Qilai Shen | Bloomberg | Getty Images
Beijing plans to break Alipay from Ant Group and create a separate app for the fintech giant’s loan business, according to a Financial Times report on Monday.
Regulators previously ordered Ant to split AliPay’s business from the Huabei and Jiebei lending businesses. Now they want credit companies to split into a separate app as well, according to the FT.
According to the plan, Ant will transfer the data of the users who base the loan decisions to a new joint credit score company, the FT reported, citing people familiar with the process. The JV will be partly state-owned, according to the report.
Shares in Hong Kong of Alibaba, an e-commerce subsidiary of Ant Group, fell more than 4% on Monday afternoon following the FT report. The decline affected the broader Chinese technology sector, as the Hang Seng Tech index fell nearly 3%, and shares of other Chinese technology heavyweights such as Tencent and Meituan also suffered a beating.
Reuters said in early September that state-owned enterprises should take a considerable stake in the joint venture credit score, with Ant and Zhejiang Tourism Investment Group owning 35% of each of the companies.
Ant will not be the only online lender in China affected by the new rules, according to the FT.
Recent developments marked more challenges for Ant’s business. The company’s $ 34.5 billion planned IPO in November was eliminated after marking regulatory discrepancies.
Months of regulatory crackdown on China’s technology giants followed, and Beijing introduced a series of antitrust and data security and protection rules.