The Chinese government have instructed Jack Ma’s Ant Group to scale back its operations and focus on payments.
This order came after the fintech giant was accused of refusing to implement compliance requirements.
After talks between Ant Group executive, and the Chinese Government over the weekend, officials, led by the Chinese central bank said Ant Group had been directed to “strictly rectify illegal credit, insurance and wealth management financial activities”.
It stopped short of telling Ant to split up the company or sell some operations, but said it had to “understand the necessity of overhauling its business” and “return to its payment origins”.
With over 700m monthly active users on its Alipay platform, Ant Group remains the largest mobile payments provider in the world – ahead of its closest rival, PayPal. However, Ant group, in recent years, has been expanding its services.
A deputy governor at China’s central bank, Pan Gongsheng, noted that the company had been showing indifference to compliance requirements and that its corporate governance has not been sound.
The Central Bank then, ordered it to “return to its origins” as a payment services provider.
Ant Group, in response to the instruction, told reporters that it had commenced work on complying with the government’s directives.
“We will enlarge the scope and magnitude of opening up for win-win collaboration, review and rectify our work in consumer rights protection, and comprehensively improve our business compliance and sense of social responsibility,” the company said.
“Ant will make its rectification plan and working timetable in a timely manner and seek regulators’ guidance in the process,” the company further added.
The latest comments from the central bank came just days after China’s State Administration for Market Regulation announced its plans to supervise Ant group, and guide it towards implementing the directive for fair competition in the market.
Experts have claimed that this move is part of the Chinese government’s crackdown on internet businesses that are growing too big.
Recently, Chinese government kicked off an antitrust hearing into Alibaba, the online marketplace also founded by Mr Ma. Mr Ma has shown displeasure about the government being critical at innovation.
Alibaba’s shares have lost more than a quarter of their value since October, when Ma accused China’s financial regulators and state-owned banks of operating a “pawnshop” mentality at a high-profile summit in Shanghai.
The crackdown on Jack Ma’s business activities has wiped more than $10bn from his fortune, and knocked him into second place on the list of China’s richest people with an estimated $49bn.
According to the Bloomberg billionaires index, the wealthiest person in China is now Pony Ma (no relation), the chairman and chief executive officer of the rival tech firm Tencent.