Alibaba is facing a record fine of nearly $1 billion by the Chinese government over allegations of anticompetitive practices.
Alibaba could be forced to pay the biggest fine in Chinese corporate history, surpassing the $975 million paid by Qualcomm in 2015, according to the Wall Street Journal.
The Chinese ecommerce giant has been accused of flouting monopoly rules by antitrust regulators, who have been turning the screws on Alibaba since last year.
Jack Ma, Alibaba’s founder and until recently China’s richest man, made a “fiercely critical” speech about China’s regulatory system in October, painting a target on Alibaba’s back which shows no signs of abating.
This instigated a firm and near immediate retaliation from the government which has launched investigations, fines and clampdowns on Ma’s numerous businesses, causing Alibaba’s shares to drop more than 25 per cent since October wiping more than $10 billion off of its market value.
According to the Wall Street Journal’s report, regulators have told Alibaba to disassociate itself from Ma or face staggering fines.
Alibaba must also scrap its policy of asking local merchants to enter exclusive relationship with it and may be forced to offload some of its subsidiary businesses.
This could include its fintech arm Ant Financial, which was set to achieve the biggest ever stock market debut raising a record $37 billion in November before being cancelled by the government.