Ant issues self-disciplinary rules, CEO resigns

Business & Technology

Alibaba affiliate and fintech giant Ant Group wants to appease the authorities with self-regulation, but will this be enough to get the government off its back?

Ant Group CEO Simon Hu spoke at a fintech conference in September, 2020. Oriental Image via Reuters Connect

The CEO of China’s fintech giant Ant Group resigned today, months after the company’s IPO was halted amid increased regulatory scrutiny on fintech firms.

Hoping to appease regulators’ concerns over the systematic risks created by the fintech company, Ant on Friday also released a set of financial self-discipline rules. This is the first of such rules issued by a fintech company. Under the rules, Ant pledged (in Chinese) to be a “more responsible” fintech platform. The rules include provisions such as:

  • Ant will not issue loans to minors, and will limit the loan amount to young people or those with low repayment ability at levels that do not exceed their means.
  • The company will prevent small business loans from flowing into the stock and real estate market.
  • Ant will also make sure to clarify to financial institutions like micro loan providers the risks of using its credit-rating service — Zhima Credit — as a reference for issuing loans.

Ant’s leadership team is also getting a shakeup. Founder Jack Ma (马云 Mǎ Yún) has uncharacteristically stayed out of the spotlight for many months, and now its top executive has resigned.

  • Simon Hu (胡晓明 Hú Xiǎomíng), resigned from the CEO position of Ant and will move to a position doing philanthropic and social responsibility work both for Ant and Alibaba. Ant’s current chairman, Eric Jing (井贤栋 Jǐng Xíandòng) will take up the CEO position, in addition to his current role.
  • Hu reportedly had been heading a team inside Ant to work with regulators to rectify its businesses. Ant is reorganizing the group into a financial holding firm overseen by China’s central bank amid pressure from the financial regulators.

Alibaba is also facing potential antitrust probes as the Chinese government continues to crack down on Jack Ma’s business empire.

  • Regulators in Beijing are considering issuing a record fine against Alibaba on antitrust charges, the Wall Street Journal reported. In brief, the government’s case is that Alibaba, Tencent and other massive Chinese tech companies have been either buying up all their competitors or steamrollering them out of existence.

Alibaba may also have a political problem. Beijing doesn’t want to “crush” Alibaba, which is popular both in China and among global investors, according to the Journal, but wants the group to “disassociate itself from its flashy and outspoken founder and align itself more closely with the Communist Party.”