* PBOC taking application signals license may come soon -
* Financial holding license to pave way for Ant market debut
* PBOC mostly done vetting license for credit-scoring JV -
HONG KONG, June 17 (Reuters) - China's central bank has
accepted Ant Group's application to set up a financial holding
company, three people with knowledge of the matter said, a key
step in finishing a year-long revamp of Jack Ma's fintech
business and reviving its stock market debut.
The People's Bank of China's (PBOC) expected approval of the
plan is the latest sign that Ant, a tech giant with financial
businesses stretching from payments to wealth management, is
poised to emerge from a regulatory crackdown.
The PBOC this month accepted Ant's application, the sources
told Reuters, amid investor hopes that Chinese regulators are
easing a crackdown on private enterprises that started in late
2020, as growth slows in the world's second-largest economy due
to COVID-19 curbs.
Ant and the PBOC did not respond to Reuters requests for
comment on Friday.
New York-listed shares of Alibaba Group Holding Ltd
, the Chinese e-commerce behemoth of which Ant is an
affiliate, were up 4% in early trading on Friday.
Although Ant has been working with financial regulators for
months on a broad revamp, the central bank's agreeing to review
the application signals the company could get its long-awaited
license soon, said the sources, who asked not to be named due to
Chinese authorities abruptly pulled the plug on Ant's IPO,
set to raise $37 billion in the world's biggest listing, in
November 2020, soon after tech billionaire founder Ma gave a
speech accusing financial watchdogs of stifling innovation.
Cracking down on Ma's business empire, the authorities put
Ant, whose businesses span payment processing, consumer lending
to insurance products distribution, under the revamp.
As part of that overhaul, the PBOC in December 2020 told
Reuters in a statement that Ant was drafting a plan to set up a
financial holding firm and that Ant should ensure that all its
financial operations were placed under regulatory supervision.
Ant had been valued as a tech firm for its IPO, but the
forced change to a financial holding company will make it
subject to capital requirements and regulations similar to those
Reuters reported last week that China's central leadership
had given Ant a tentative green light to revive its IPO in
Shanghai and Hong Kong.
Aiming to file a preliminary prospectus for the share
offering as early as next month, Ant is awaiting final feedback
from financial regulators, especially the PBOC, on the set-up of
the financial holding firm, one source said.
To formally revive its mega-listing, Ant has to secure the
key financial holding license and complete its restructuring,
the sources said.
The scuttled IPO marked the start of the crackdown that hit
China's technology giants and was quickly extended to other
sectors, including property and private education, wiping
billions off market values and triggering layoffs at some firms.
Beijing, however, has softened its stance in the last few
months. Vice-Premier Liu He told tech executives last month the
government supported the development of the sector.
Apart from the financial holding company license, Ant's
personal credit-scoring joint venture has applied for a permit,
as part of the fintech major's business revamp.
The central bank has mostly finished vetting the credit
scoring license, said another source with direct knowledge of
the matter, after having accepted the application for the unit
Ant has agreed to establish the JV with partners including
three state-owned companies under a plan allowing state-backed
investors to take a combined 48% stake in its key asset - a data
treasure trove of over 1 billion users.
Ant will own 35% of the venture, and the only
non-state-backed shareholder, Transfar Group, will hold 7%,
while Hangzhou Xishu will get the remaining 10%, the PBOC said
Hangzhou Xishu is an entity that operates employee stock
ownership plans, another source has told Reuters.
But recently, regulators have suggested further tweaks of
the shareholding structure to increase the holdings of state
investors, with license approval expected after the adjustment
is made, said the fourth source.
Ant, via super-app Alipay, collects data from over 1
billion users, many of whom are young, internet-savvy people
without credit cards or sufficient bank credit records, as well
as 80 million merchants, according to analysts and its IPO
U.S.-listed shares of Chinese companies Pinduoduo,
Bilibili, Baidu, NIO, JD.COM
and Tencent Music were up between 1.6% and
6.2% on Friday.
(Reporting by Julie Zhu and Xie Yu; Ediitng by Sumeet
Chatterjee and William Mallard)