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Regulators previously ordered Ant to separate AliPay’s business from loan companies Huabei and Jiebei. They now want the credit firms to be split into an independent app as well, according to the FT.
According to the plan, Ant will pass the user data underlying loan decisions to a new credit scoring joint venture, the FT reported, citing people familiar with the process. The joint venture will be partly owned by the state, according to the report.
Hong Kong-listed shares of Alibaba, the e-commerce subsidiary of Ant Group, fell more than 4% on Monday afternoon in the wake of the FT report. The decline weighed on the broader Chinese tech sector, with the Hang Seng Tech Index falling nearly 3%, as stocks of other Chinese tech heavyweights like Tencent and Meituan were also beaten.
Ant will not be the only online lender in China affected by the new rules, according to the FT.
The latest developments have marked more challenges for Ant’s business. The company’s planned $ 34.5 billion IPO in November was scuttled after regulatory differences were reported.
Months of regulatory crackdown on Chinese tech giants followed, and Beijing introduced a host of rules regarding anti-monopoly and data security and protection.