Tencent shares plunge after report of record fine for money laundering
Tencent office in Guangzhou’s TIT Creativity Industrial Zone is home to WeChat Mascots.
TencentAfter the Monday stock market crash, shares fell in Hong Kong Wall Street JournalAccording to reports, the record-breaking fine could be imposed on the Chinese tech company for breaking anti-money laundering regulations.
Citing people with knowledge of the subject, the WSJ stated that WeChat PayTencent’s mobile payments platform, ‘, was open to the transfer of money for criminal purposes such as gambling. According to the newspaper, Tencent failed to comply fully with regulations regarding checking merchants’ identities and the origin of funds.
CNBC reached Tencent Monday but they were not available for comment immediately.
The tech company’s shares fell almost 10% and closed at $331.80 Hong Kong dollars ($42.38). This is their lowest close level since Dec. 5, 2019.
A record-breaking close at 766.50 Hong Kong dollar in January 2021,Tencent shares lost around 56% and the company’s value has dropped to more than 500 billion.
After more than a decade of Beijing’s intense regulation tightening on China’s technology sector, the WSJ report is the result. Beijing has tried to limit the power and eliminate some of the alleged abuses. bad behaviorsThese are the top technology companies. China sought regulation in areas such as antitrust and mergers. data protection.
Non-bank financial actors such as Tencent or Alibaba-affiliate Ant Group have been a particular target of regulators. These companies provide financial services without being subject to strict regulatory oversight like banks. China wants to make this change.
The Wall Street Journal stated that Tencent could face a possible fine in excess of hundreds of million of yuan. However, it is currently under review.
Other Chinese tech companies also have shares that are listed in Hong Kong took a battering on MondayAs already fragile sentiment toward the country’s Internet sector continues to be tested
China has a lot of challenges new wave of Covid infectionsAll across the country, there have been lockdowns and factory closings. Investors remain unsure whether U.S. listed Chinese companies will continue to trade in the United States. could face delistingsAnd if Beijing will keep up its regulatory assault.