Ant Group has been ordered by Chinese regulators to drastically change its business model and return to its roots as a payment service provider, Bangkok Post reports.
China's central bank summoned Ant executives and demanded the company "strictly rectify" its lending, insurance and wealth management services.
The edict comes just weeks after Ant Group's record-breaking IPO was halted at the last minute by Beijing, which has been ruthless in its takedown of a company once vaunted as the poster child for Chinese technology.
Regulators also launched an anti-monopoly investigation into Alibaba -- of which Ant Group is a subsidiary.
Ant Group made its name via its main product Alipay, the online payments platform and super app that is now deeply embedded in China's economy. But the company also expanded into offering loans, credit, investments and insurance to hundreds of millions of consumers and small businesses, spurring fear and jealously in a wider banking system geared more for supporting state policy and large corporations.
Ant Group’s problems include alleged flaws in corporate governance, poor legal awareness and a lack of regulatory compliance, while it stands accused of ‘leveraging market dominance to exclude competitors’.
Jack Ma had previously lashed out at China's outdated financial system, calling state-owned banks ‘pawn shops’ in an October speech that led to him being summoned for regulatory talks shortly before Ant's IPO was suspended. He has edged away from the limelight since the IPO collapsed.
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