China hits Alibaba affiliate Ant Group hit with $985 million fine

China’s central bank hit Alibaba affiliate Ant Group with a 7.12 billion yuan fine ($985 million) on Friday.

The People’s Bank of China, which issued the fine, said that the penalty was in response to violations of various laws and regulations, including around corporate governance, consumer protection and anti-money laundering requirements.

The fine is one of the biggest against a Chinese internet firm and looks to conclude the years-long scrutiny and restructuring of Ant Group, after its blockbuster $37 billion initial public offering was scrapped in late 2020.

Since that moment, which sparked an intense two-year crackdown from Beijing on China’s domestic tech sector, Ant has been forced to overhaul its business. This included turning itself into a financial holding company under the purview of the PBOC.

Alibaba owns around a 33% stake in Ant Group, and Chinese billionaire Jack Ma is the founder of both firms.

Authorities cancelled Ant’s listing over regulatory concerns in 2020.

Recent signs have emerged that Ant has been on the right side of regulators. In January, the company received approval to expand its consumer finance business.

The fine and potential resolution to Ant’s regulatory woes come as China looks to inject life into private industry amid a difficult domestic economic picture.

In its Friday statement, the PBOC said that most of the outstanding problems in the financial business of so-called platform companies, such as Ant Group, have been rectified. The central bank’s job is now “normalized supervision,” suggesting the strict measures like fines may be calming down.

Ant Group said in a statement on Friday that it will “comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance.”

A possible listing for Ant Group is likely now in the spotlight, although the company’s valuation has dropped significantly over the last two and a half years.