HANGZHOU, CHINA – OCTOBER 27: The logo of Ant Group is seen at the company headquarters in Hangzhou city, Zhejiang province, China, on October 27, 2020.
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Ant Group on Saturday announced a share buyback plan that values the fintech giant at 567.1 billion yuan ($78.54 billion), as management seeks to top up its employee incentive pool and amid regulatory scrutiny The company let some investors back out after imposing a fine.
That marked a sharp drop from the company’s $300 billion-plus valuation in mid-2020, followed by the cancellation of an IPO planned for later that year.
Ant Financial said that it has proposed to all shareholders to repurchase up to 7.6% of the equity, and the repurchase price is equivalent to the group’s valuation of approximately 567.1 billion yuan.
“The repurchased shares will be transferred to Ant Group’s employee incentive plan to attract talent. The repurchase plan will also provide liquidity options for company investors.”
Ant Financial’s main shareholders, Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Equity Investment Partnership, have voluntarily decided not to participate in the buyback, the company added.
China’s central bank said on Friday that financial regulators would impose fines totaling 7.12 billion yuan on Ant Financial and its subsidiaries, marking the end of a years-long regulatory overhaul for the fintech firm and the end of China’s A crucial step in the fight against fintech companies. internet field.
Ant Financial, founded by billionaire Jack Ma, operates Alipay, China’s ubiquitous mobile payment app, as well as a distribution business for consumer loans and insurance products, among other things.
Ant Financial began a sweeping business restructuring in April 2021, which included transforming itself into a financial holding company subject to similar rules and capital requirements as banks.
Ant Financial’s punishment paves the way for the fintech firm to obtain a financial holding company license, focus on boosting growth and eventually restart plans to list on the stock market.
For the broader tech industry, Ant Financial’s fine marks a key step in China’s brutal crackdown on private enterprise that began with the cancellation of Ant’s IPO in late 2020 and subsequently wiped out the value of several companies billions of dollars.
On Friday, Chinese authorities also announced fines against two Chinese banks, an insurance company and Tenpay, an online payments platform owned by Tencent Holdings.
The People’s Bank of China stated that most of the outstanding problems in the financial business of platform companies have been rectified, and regulators will shift from targeting individual companies to overall supervision of the industry.