China launched an investigation into Alibaba and has called for a high-level meeting over financial regulations with its affiliate fintech company, Ant Group on Thursday.
Market observers perceived the move as a crackdown on Jack Ma’s ever-growing tech empire.
China’s State Administration for Market Regulation (SAMR) is investigating Alibaba’s practice of forcing sellers to sign exclusivity contracts. While its policy has drawn criticism from the retail industry, others consider it a standard market practice.
Alibaba (NYSE: BABA) shares slumped by 13.34% percent following the news about China’s probe on Thursday. This was the stock’s biggest one-day slide since mid-November.
The People’s Bank of China and three financial watchdogs have said they will conduct a high-level meeting with Ant Group, which owns China’s largest digital payment platform Alipay. They asked the company to implement tighter financial regulations in its banking services.
Ant Group said it would “diligently study and strictly comply with regulatory departments’ requests”.
The three financial watchdogs, China Banking Regulatory Commission, China Securities Regulatory Commission, and State Administration of Foreign Exchange, said the meeting involves “supervisory and guidance” talks.