The Chinese government has fined Alibaba and two other companies for not reporting past deals, closing a regulatory grey area that China’s foreign-listed tech companies have enjoyed for more than a decade, reported the Financial Times.
China’s market regulator said on Monday it had fined Alibaba, Tencent-backed online bookstore China Literature and logistics group Shenzhen Hive Box for failing to ask for regulatory approval for deals made as early as 2014.
The move signals Beijing’s determination to bring China’s tech giants to heel after a decade of fairly unrestricted growth. Last month, regulators unveiled draft antitrust regulations that sent Chinese tech stocks crashing. Before that, regulators suddenly halted Ant Group’s Shanghai public offering, which would have been the world’s largest, said the FT.
“The rule has always been there, it’s just not been enforced. This is a clear signal that companies structured as variable interest entities are not exempted any longer,” said Scott Yu of law firm Zhong Lun.