The Chinese technology company Ant Group of billionaire Jack Ma is progressing in resolving its regulatory issues with the Chinese Banking and Insurance Regulatory Commission. The regulator allowed the group to increase the capital of its consumer finance subsidiary by 10.5 billion yuan (about €1.4 billion) shortly before the turn of the year, according to a statement from the authority.
Ant will own 50% of the subsidiary after the capital increase, while the Hangzhou city government, the second-largest shareholder, will own 10% through a holding company. the shares of Ant’s parent company Alibaba rose more than 8% in Hong Kong. In U.S. trading, Alibaba shares then soared 13.08% to $104.01.
With the regulators’ approval comes hope among investors that Ant and Alibaba will be able to settle their protracted dispute with regulators. Alibaba holds a one-third stake in Ant.
Ant had been targeted by Chinese authorities in the fall of 2020, shortly before its own planned mega IPO in the United States – as had other tech companies that wanted to raise capital in the U.S. or had already done so. In this context, China had criticized, among other things, the allegedly inadequate data security of consumers and referred to national security aspects.