Technology

China splits Alipay from Ant Group, forcing the creation of a brand new credit score app: FT

china-splits-alipay-from-ant-group-forcing-the-creation-of-a-brand-new-credit-score-app-ft

The headquarters of Ant Group Co. in Hangzhou, China on Wednesday January 20, 2021.

Qilai Shen | Bloomberg | Getty Images

Beijing plans to liquidate Alipay from Ant Group and create a separate app for the fintech giant’s lending business, according to a Financial Times report on Monday.

The regulators had previously ordered Ant to spin off AliPay’s operations from the Huabei and Jiebei lending businesses. They now also want to split the loan transactions into a separate app, according to the FT.

According to the plan, Ant will hand over the user data underpinning the credit decisions to a new credit assessment joint venture, the FT reported, citing people familiar with the process. The JV will be partially state-owned, the report said.

The Hong Kong-listed shares of Alibaba, the e-commerce subsidiary of Ant Group, fell more than 4% on Monday afternoon after the FT report. The decline weighed on the broader Chinese tech sector as the Hang Seng Tech index fell nearly 3%, beating stocks of other Chinese tech heavyweights like Tencent and Meituan.

Reuters said in early September that state-owned companies will take a significant stake in the credit scoring joint venture, with Ant and the Zhejiang Tourism Investment Group each owning 35% of the company.

Ant won’t be the only online lender in China affected by the new rules, according to the FT.

Recent developments presented additional challenges for Ant’s business. The company’s proposed $ 34.5 billion initial public offering in November was foiled after regulatory inconsistencies were discovered.

Months of regulatory crackdowns against China’s tech giants followed, and Beijing introduced a series of anti-monopoly and data security and protection rules.

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