Late last year, Ant Group, would have made history in China, an IPO which would see Jack Ma's Ant raise $34.5 billion at a valuation of over $313 billion in November 2020. However, those plans were scuppered by Chinese regulators citing Ant's finance model as the reason and called for restructuring of the company.
"The overhaul, directed by the People's Bank of China, subjects Ant to tougher regulatory oversight and minimum capital requirements... China's central bank said that under a "comprehensive and feasible restructuring plan," Ant would also cut the "improper" linkage between Alipay and its credit card and consumer loan services. Its trove of consumer data was widely seen as one of the company's key advantages over its competitors." BBC
Earlier this year, Ant Group agreed to set up a personal credit reporting company, which will strengthen the protection of personal information and effectively prevent the abuse of data BBC reported. Now, the company is in an advanced stage of this plan.
According to Wall Street Journal, Ant Group Co. is in talks with Chinese state-owned enterprises to create a credit-scoring company that will put the fintech giant's proprietary consumer data under regulators' purview.
The new company is expected to go live in the third quarter of this year and could see Ant group give up some of its control on data relating to the financial habits of Chinese citizens. Data is the secret behind Ant group's recent success. Ant Group has access to the data of more than one billion individuals in China thanks to the use of the Alipay app, which is used by individuals to spend, borrow and invest their money.
The ongoing talk between Jack Ma's Ant Group and Chinese state-owned enterprises could lead to establishing a joint venture that would be licensed as a credit-scoring company. Discussions are still ongoing, and decisions are yet to be made. However, regulators are pushing for prospective state-owned shareholders to play a more significant role in the new entity in order to have a bigger say in how it operates.
China in focus
GDP: 14.28 trillion dollars compared to Singapore's $372.063 billion in 2019
Population: 1.398 trillion compared to Singapore's 5,703,569 in 2019
GDP per capita: $10,216 compared to Singapore's $65,233 in 2019
