Central bank hasn’t accepted Ant Group’s application to set up a financial holding company, says insider

June 17, 2022 0 Comments

So far, the central bank has not accepted Ant Group’s application to set up a financial holding company, Chinese financial media Yicai (第一财经) reported Friday evening Beijing time, citing source familiar with the matter.

“According to the relevant regulations, the central bank will make an announcement after accepting the application for the establishment of a financial holding company submitted by the applicant,” the sources said.

As the news emerged, Alibaba’s NYSE-listed stock started to fall. Its stock price increased 10% before the market opened on reports that the central bank has accepted applications from its financial affiliate.

Earlier today, Reuters quoted sources as saying that China’s central bank has accepted Ant Group’s application to set up a financial holding company, bringing it a step closer to resume IPO plan.

In November 2020, Chinese authorities abruptly pulled the plug on Ant’s IPO, set to raise $37 billion in the world’s biggest listing, saying “Ant failed to meet the issuance and listing conditions or information disclosure requirements due to changes in the financial technology regulatory environment.”

Ant had been valued as a tech firm for its IPO, but the forced change to a financial holding company will make it subject to capital requirements and regulations similar to those for banks.

To formally revive its mega-listing, Ant has to secure the key financial holding license and complete its restructuring. The fintech company has been working with financial regulators for months on an extensive overhaul. The central bank’s agreement to review the application indicate that the company could soon obtain the long-awaited license.

Apart from the financial holding company license, Ant’s personal credit-scoring joint venture has applied for a permit, as part of the fintech major’s business revamp.

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