Ant fine may be lowered by 25pc, charges downgraded

Chinese regulators are expected to fine Ant Group about a quarter less than the more than US$1 billion (HK$7.8 billion) initially planned and downgrade their charges against it, sources said, as they seek to end a years-long crackdown on marquee technology firms.

The fine being considered now is about 5 billion yuan (HK$5.7 billion), three people with knowledge of the matter said.

Chinese authorities, notably the People's Bank of China which has been driving a revamp at Ant after its US$37 billion initial public offering was scuttled in 2020, are expected to announce the fine in the coming months, two of the people said.

The fine would help pave the way for the fintech giant to secure a long-awaited financial holding company license, seek growth, and eventually revive its listing plans.

For the broader technology sector, an Ant fine decision will mark a key step towards the end of China's bruising crackdown on private enterprises that started with the scrapping of Ant's IPO and has wiped billions off the market values of Chinese companies.

A smaller fine following the recent return to China of Ant's founder Jack Ma Yun, who stayed overseas for more than a year since the IPO fiasco, offers support for Beijing's softening tone toward the private sector.

That would also be in sync with China's efforts to bolster confidence among private entrepreneurs and spur growth in the economy battered by Covid, the sources said.

Apart from lowering the fine, authorities are also looking to soften the wording of their charges against Ant, two of the people said.

Authorities now plan to cite financial risks and operating certain businesses without proper licenses as the triggers for the fine, they added.

Earlier, the fine was likely to be focused on alleged violations related to "disorderly expansion of capital" and the corresponding financial risks its once freewheeling businesses caused.

This came as TikTok's owner ByteDance remained the world's most valuable unicorn despite declining US$150 billion in value from a year ago, according to the latest report by the Hurun Research Institute.

A unicorn is referring to a start-up that is worth at least US$1 billion and not yet listed on a public exchange.

Chatbot ChatGPT's parent company OpenAI is one of the world's top-performing unicorns in the past year, soaring sevenfold in value to US$20 billion and surging from 272nd to 17th in the global rankings, the report said.