Increased regulatory scrutiny has prompted the CEO of China’s Ant Group to step down and also spurred the company to develop financial self-discipline rules, Reuters reported on Friday (March 12).
Simon Hu, the group’s chief executive officer since 2019, is being replaced by company veteran Eric Jing, who will also remain in his current role as executive chairman, according to an internal memo seen by Reuters.
“The Ant Group Board of Directors has accepted Mr. Simon Hu’s resignation request, due to personal reasons,” according to a company statement, per Reuters.
Ant is in the midst of restructuring as a financial holding company due to new, stricter regulations that require FinTechs to face the same mandates and capital requirements as traditional financial institutions.
The new financial self-discipline rules are being published by Ant Group about four months after regulators in China pulled the plug on its $37 billion dual public listings in Shanghai and Hong Kong. The initial public offering (IPO) would have been the largest across the globe. Beijing has since ramped up scrutiny into the company and tightened overall FinTech regulations in the country.
The China Banking and Insurance Regulatory Commission chief Guo Shuqing said there aren’t any restrictions on how Ant Group restructures as a financial services business, but all activities are subjected to rules and regulations.
The exit of Hu follows complaints on social media by some Ant employees that the halted IPO also killed an anticipated windfall they would have made from selling their shares.
Jing reportedly told Ant staffers that incentive programs will be looked into and in April, new solutions will be announced to help them with financial concerns, according to two sources, per Reuters.
Ant Group is reportedly integrating the majority of its micro-lending operations — Jiebei and Huabei — into its new financial services division. The move would help make it easier for the company to grow.
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