China is asking Ant to go back to the origins of payment services

Photographer: Qilai Shen / Bloomberg

Chinese regulators imposed a number of requirements Ant Group Co., including the fact that the company returned to its origins as a payment service provider and reformed its lending, insurance and wealth management services, after convening the fintech giant on Saturday.

Ant should be aware of the seriousness and need to restructure its business and draw up a plan and timeline as soon as possible, the People’s Bank of China said in a statement on Sunday. The Hangzhou-based firm must also set up a financial holding company to ensure capital adequacy and compliance with connected transactions, while protecting the privacy of personal data in its credit score services, he said.

Authorities also criticized Ant for what it said was poor corporate governance, contempt for regulatory compliance requirements and participation in regulatory arbitration. The PBOC said Ant used his domain to exclude rivals, harming the interests of consumers.

China on Thursday launched an investigation into alleged monopolistic practices at Alibaba Group Holding Ltd. and convened the Ant subsidiary to a high-level meeting on financial regulations, which intensified scrutiny over the two pillars of billionaire Jack Ma’s Internet domain. Pressure on Ma is critical to a broader effort to curb an increasingly influential internet sphere.

Once acclaimed as engines of economic prosperity and symbols of the country’s technological prowess, the empires built by Ma, The president of Tencent Holdings Ltd., “Pony” Ma Huateng, and other tycoons are now under control after gathering hundreds of millions of users and gaining influence over almost every aspect of daily life in China.