China’s central bank says it has asked the country’s payments giant Ant Group Co Ltd to shake up its lending and other consumer finance operations, the latest blow to its billionaire founder and controlling shareholder Jack Ma.
The announcement came more than a month after Chinese regulators abruptly suspended Ant’s blockbuster $37bn initial public offering in Shanghai and Hong Kong and only days after the country’s antitrust authorities said they had launched a probe into Ma’s e-commerce conglomerate Alibaba Group Holding Ltd.
Chinese regulators and Communist Party officials have set about reining in Ma’s sprawling financial empire after he publicly criticised the country’s regulatory system in October for stifling innovation.
Regulators have urged Ant to rectify financial regulatory violations, including in its credit, insurance and wealth management businesses and overhaul its credit rating business to protect personal information, People’s Bank of China (PBOC) Vice Governor Pan Gongsheng said on Sunday.
Pan’s comments stopped short of calling for a breakup of Ant, yet pointed to a significant operational restructuring. Ant should set up a separate holding company to ensure capital adequacy and regulatory compliance, Pan said.
Ant should also be fully licensed to operate its personal credit business and be more transparent about its third-party payment transactions and not engage in unfair competition, Pan added.
The Hangzhou-based firm now needs to move forward with setting up a separate financial holding company to ensure it has sufficient capital and protect personal private data, the central bank said.
Ambitions curtailed?
Ant said in a statement it would establish a “rectification” working group and fully implement regulatory requirements.
The series of edicts represent a serious threat to the expansion of Ma’s online finance empire, which has grown rapidly from a PayPal-like operation into a full suite of services over the past 17 years.
[Bloomberg]
Before regulators intervened, Ant’s public listing would have valued it at more than $300bn, with existing backers including United States-based private equity firms Carlyle Group Inc and Silver Lake Management LLC.
“This is the culmination of a string of regulations and sets the direction for Ant’s business going forward,” Zhang Xiaoxi, a Beijing-based analyst at Gavekal Dragonomics, told the Bloomberg news agency. “We haven’t seen clear indication of breakup yet. Ant is a giant player in the world and any breakup needs be to be cautious.”
[Bloomberg]
Ma was advised by the Chinese government to stay in the country, Bloomberg has reported, citing a person familiar with the matter. Ma could not be reached for comment, the Reuters news agency said.
Pan said Ant representatives met on Saturday with officials from the PBOC and other Chinese banking, securities and foreign exchange regulators.
Defiance of regulations
During the meeting, regulators pointed out Ant’s issues including its poor corporate governance, defiance of regulatory demands, the use of its market advantage to squeeze out competitors and harming consumers’ legal interests, according to Pan.
The central bank said Ant used its dominance to exclude rivals, hurting the interests of its hundreds of millions of consumers.
Ant traces its beginnings to Alipay, which was launched in 2004 as a payment service, and is 33 percent owned by Alibaba. Its Alipay app dominates digital payments in China, with more than 730 million monthly users. The Hangzhou-based company also built an empire connecting China’s borrowers and lenders, securing short-term loans within minutes.
Last month, China issued draft rules aimed at preventing monopolistic behaviour by internet firms and the Politburo this month promised to strengthen anti-monopoly efforts in 2021 and rein in “disorderly capital expansion”.
China also warned internet giants this month to brace for increased scrutiny, as it slapped fines and announced probes into mergers involving Alibaba and Tencent Holdings Ltd.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
[Bloomberg]
[Bloomberg]
