The financial services group, which provides wealth management among its offerings, is proposing to change its structure to allay regulators' worries. In November last year, a planned IPO by the Chinese group was suddenly cancelled.

Ant Group has agreed to a restructuring plan with Chinese regulators under which the fintech giant will become a financial holding company, a move coming weeks after its planned IPO was suddenly cancelled, shocking financial markets.

The plan calls for putting all of Ant Group’s businesses into the holding company, including its payment processing and technology offerings in areas such as blockchain and food delivery, Reuters reported, quoting an unnamed source.

Such a move would potentially reduce the regulatory woes of Ant Group’s founder, Jack Ma. Ant Group is an affiliate of the giant e-commerce group Alibaba which Ma had built up. 
 

Bloomberg first reported that Ant Group had reached an agreement with Chinese regulators about the proposed restructuring.

Reports have pinpointed a speech on 24 October last year by Ma as the start of his troubles. In that speech, he attacked China’s regulatory system. The IPO, due in early November and slated to be worth $37 billion, was suspended before its dual listing in Hong Kong and Shanghai.

Chinese regulators are reporteldy fretting about Ant Group’s impact on the country’s financial stability. Regulators have reportedly considered subjecting Ant to tighter capital and leverage regulations. Under that scenario, state banks or other types of state investors would buy into Ant Group to help cover any potential capital shortfall as a result of the tightened rules.

The saga underlines how Chinese regulators are concerned that their ability to control financial flows – and prevent future stresses – is potentially challenged by tech-driven financial services organisations such as Ant Group.