Several regulators along with banking watchdogs have asked institutions to review their exposure to Ant, its subsidiaries, and shareholders up to January 2022, the sources said.
According to the sources, China’s renewed scrutiny of Jack Ma’s Ant is by far the most comprehensive review of the group. They also added that the firms have been asked to report to the authorities on the findings as soon as possible.
The reason for the latest regulatory review against Ant is not clear or if it will lead to any actions by the authorities, they added.
In November 2020, Chinese regulators pulled the plug on Ant’s $37bn initial public offering and asked it to restructure as a financial holding company.
The Chinese authorities have been scrutinising industries ranging from finance to real estate in a bid to mitigate financial risk.
Bloomberg banking & fintech analyst Francis Chan said: “Beijing’s call for China’s banks to check their exposures to Jack Ma’s unlisted Ant Group may jeopardize the company’s ties with financiers for its online-loan business, with our scenario analysis suggesting its valuation could plunge to $63bn vs. the $320bn level targeted in the 2020 IPO.”
Earlier this month, China’s central bank imposed a monetary fine of $3.52m on Ant-backed MYBank for violating rules on credit scoring management and transacting with unidentified customers.
Before that, China Cinda Asset Management scrapped its plans to invest $942.27m in Ant’s Chongqing Ant Consumer Finance.
Ant Group had set up Chongqing Ant Consumer Finance as part of the restructuring process to hold its consumer lending units Huabei and Jiebei.