China hits Alibaba affiliate Ant Group hit with $985 million fine

China’s central bank takes a hit alibaba On Friday, its subsidiary Ant Group was fined 7.12 billion yuan ($985 million).

The People’s Bank of China, which issued the fine, said the penalty was for violations of several laws and regulations, including corporate governance, consumer protection and anti-money laundering requirements.

The fine, one of the largest ever imposed on a Chinese internet company, is aimed at ending years of scrutiny and restructuring at Ant Group after its $37 billion initial public offering was called off in late 2020.

Since that moment, sparking Beijing’s two-year crackdown on China’s domestic tech sector, Ant Financial has been forced to overhaul its business. This includes turning it into a financial holding company under the jurisdiction of the People’s Bank of China.

Alibaba owns about 33 percent of Ant Group, and Chinese billionaire Jack Ma is the founder of both companies.

Authorities canceled Ant Financial’s listing in 2020 due to regulatory concerns.

Recent signs suggest that Ant Financial has been on the right side of regulators. In January, the company received approval to expand its consumer finance business.

The fine and a potential solution to Ant Financial’s regulatory woes come as China looks to energize the private sector amid a grim domestic economy.

The People’s Bank of China said in a statement on Friday that most of the outstanding problems in the financial business of so-called platform companies such as Ant Group have been rectified. The central bank’s job now is to “normalize regulation”, suggesting that strict measures such as fines may be calmed down.

Ant Group said in a statement on Friday that it would “seriously and sincerely abide by the terms of the penalty and continue to further strengthen our compliance governance.”

Ant’s possible listing may now be in the spotlight, even though Ant’s valuation has fallen sharply over the past two and a half years.