HANGZHOU, CHINA – OCTOBER 27: Ant Group logo at its headquarters in Hangzhou, Zhejiang, China on October 27, 2020.
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Ant Group said on Saturday the corporate value of the fintech giant fell as management sought to replenish its employee incentive pool and force some investors out after regulators fined the company. announced a share buyback plan valuing the company at 567.1 billion yuan ($78.54 billion).
This marked a plunge in the value of more than $300 billion attributed to the company in mid-2020, before its planned IPO was canceled later that year.
Ant said it has proposed to all shareholders to buy back up to 7.6% of its shares at a price equivalent to a group valuation of about 567.1 billion yuan.
“The repurchased shares will be transferred to Ant Group’s employee incentive plan to attract talent. The repurchase offer will also provide liquidity options for investors in the company,” the company said. said.
Ant’s major shareholders, Hangzhou Junhan Equity Investment Association and Hangzhou Junzhi Equity Investment Association, have voluntarily decided not to participate in the share buyback, the company added.
The People’s Bank of China announced on Friday that financial regulators will fine Ant and its subsidiaries totaling 7.12 billion yuan. It marks an end to years of regulatory reforms against fintech companies and an important step towards ending the country’s crackdown. Internet department.
Founded by billionaire Jack Ma, Ant operates China’s ubiquitous mobile payment app Alipay, as well as businesses selling consumer finance and insurance products.
Ant embarked on a sweeping restructuring in April 2021, including transforming into a financial holding company that would impose rules and capital requirements similar to banks.
Ant’s fine paves the way for the fintech firm to secure its financial holding company license, focus on boosting growth, and eventually revive its plans to go public on the stock market.
For the broader tech sector, the Ant fine is an important step towards ending the brutal crackdown on private Chinese companies that has wiped out billions of dollars in market capitalization since Ant’s canceled IPO at the end of 2020. Become.
On Friday, Chinese authorities also announced fines against two Chinese banks, an insurance company and Tencent Holdings’ online payment platform Tenpay.
The People’s Bank of China (PBOC) said most of the prominent problems in the financial business of platform companies have been rectified, and regulators will move from focusing on specific companies to regulating the entire industry, the central bank said.