It appears Chinese authorities have finally induced Jack Ma to cave. After the co-founder of Alibaba and Ant was feared possibly missing as he disappeared from public few during the final months of last year which coincided with increased government scrutiny on his hugely successful and rapidly expanding Ant Financial fintech - since subject of an antitrust investigation initiated in December - only to briefly re-emerge for a live-streamed conference in January, China has apparently made it clear that the only way Ma could make amends for previously pointing out that Chinese banks are unsound is if Beijing gets regulatory control over Ant.
New Bloomberg reporting finally puts to rest months of speculation over whether Ma would resist the Chinse crackdown which also saw authorities abruptly halt a planned-for blockbuster IPO in November, notably after Ma personally pissed off President Xi: "Ant Group Co. and Chinese regulators have agreed on a restructuring plan that will turn Jack Ma’s fintech giant into a financial holding company, making it subject to capital requirements similar to those for banks."
While not yet officially announced, "The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas such as blockchain and food delivery, people familiar with the matter said," Bloomberg writes further.
And there's likely more severe moves toward further regulation from central authorities to come:
Ant’s restructuring plan marks the first big step in what’s expected to be a lengthy overhaul process, as regulators draw up detailed capital requirements and other guidelines for companies that span multiple financial business lines.
To translate, in short Ant Group will now be overseen by China’s central bank.
We noted before that the silencing of Ma or even any official reporting on the antitrust probe for that matter clearly indicates the sensitivity of this topic at the highest levels of Chinese politics, essentially suggesting that Ma had outlived his usefulness, and that Beijing would never tolerate a billionaire with so much power and influence, both at home, and in the West.
China’s central bank nationalizing Ant Financial is global security concern. The dystopian scenario chapter of my book The Big Nine explains why. This announcement is very bad...— Amy Webb (@amywebb) January 27, 2021
China's regulatory framework dictating rules for financial holding companies was only unveiled in September, thus "they’ll almost certainly force the company to slow the torrid pace of expansion that has made it China’s dominant fintech player and one of the world’s most valuable startups," Bloomberg notes further.
While Ant is still said to be mulling ways to revive its initial public offering, this latest news is the clearest indicator throughout the saga that it will be a long time in coming, if ever at all.