Alibaba shares slump 5% on Beijing’s scrutiny of Ant Group

BEIJING (AFP): Shares in Alibaba slumped more than five percent on Tuesday following a report that Beijing regulators had ordered a fresh investigation into state firms’ links with the Chinese e-commerce giant’s fintech arm Ant Group.

China’s biggest state-owned firms and banks were told to begin a new round of checks on their financial exposure and other links to Ant and its subsidiaries, Bloomberg reported, in another blow to the beleaguered company and Alibaba’s billionaire co-founder Jack Ma.

Since late 2020, Chinese regulators have launched a wide-ranging crackdown on alleged anti-competitive practices by Alibaba and other domestic tech giants, which saw a record-breaking planned IPO by Ant Group pulled at the last minute.

Bloomberg described the fresh investigation as “by far the most thorough and wide-ranging look into deals with Ant”, citing anonymous sources familiar with the matter.

It is unclear what triggered the fresh scrutiny, the report said.

Alibaba shares slumped by 5.1 percent in early Hong Kong trading Tuesday, reaching the lowest point since it was listed in the city in 2019.

Beijing’s regulatory crackdown on the tech sector after years of runaway growth has affected several other firms specialising in food delivery, gaming, tutoring and ride-hailing.

Shares in Chinese food delivery giant Meituan also extended their losses on Tuesday, dipping almost five percent.

It had plummeted more than 20 percent since Friday — the stock’s biggest fall in seven months — when China’s top economic planner ordered internet platforms to lower fees for struggling restaurants.

Alibaba’s latest quarterly earnings are set to be announced Thursday.