Shares in China’s largest technology company Alibaba fell significantly after a report came out which said its financial subsidiary , Ant Group, was under investigation by authorities.
Regulators are looking to split and break down Alipay, China’s largest payment app with more than a billion users, according to report from the Financial Times.
What Is Being Planned?
A separate app for the profitable subsidiary of Alibaba will be built under the system being looked at by the authorities.
It could be Beijing’s latest move to strengthen its control on big business houses and groups.
The Alibaba affiliate could also be instructed to pass on user details regarding their loan decisions to customers to a new credit score company, which will be privately owned with partial state ownership, the report said.
Share Price Falls 4.2%
Alibaba shares closed 4.2% below in Hong Kong trading on Monday.
This would not be the first time the Ant Group has been investigated and scrutinized by the Chinese government.
Jack Ma’s business empire, founder of both Ant Group and Alibaba, has been hit by a series of high-level regulatory measures.
Chinese Authorities Vs Jack Ma
Chinese authorities began showing growing interest in the Ant Group in October last year after Mr Ma criticized the regulators, suggesting they were not conducive of innovation.
The following month, regulators halted the $ 37bn (£ 27bn) historic IPO of Ant Group.
In April, Alibaba was fined a record $ 2.8bn for concerns about monopolistic behavior.
At the same time, Chinese authorities were urging Ant group to undertake a business transformation project, including restructuring itself to a financial services company.
It was also told to wrap up its two small loan services, Jiebei and Huabei, to a new separate financial company.