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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.

A warning to Jack Ma

The People’s Daily, the state mouthpiece, asserted that waging a battle against alleged monopolies is now high on the agenda.

“Anti-monopoly has become an urgent issue that concerns all matters,” it said in a commentary coinciding with the probe’s announcement. It added that “wild growth” in markets needs to be curbed by law.

In November, Ant Group, Ant Financial, and Alipay were preparing for what would have been the world’s largest initial public offering (IPO) but it was suspended in Shanghai and Hong Kong a day after Ma met with Chinese regulators.

The suspension was widely attributed to “changes to the financial technology regulatory environment and other major issues." However, analysts called the action as a warning to Ma, who had publicly taken a swipe at regulators in a speech shortly before the IPO.

Ma, a powerful Chinese tech entrepreneur, is the co-founder of Alibaba and Ant Group. He is also the richest person in China.

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