Tencent Holdings Ltd closed 9.8% lower at US$331.80 on Monday – its lowest price in nearly two years - on reports it may face a record fine for potentially breaking Chinese anti-money laundering regulations.
The People’s Bank of China found the company’s WeChat Pay allowed funds for illicit purposes, like gambling, to be transferred, while it also failed to identify its users and merchants that transacted on the platform, the Wall Street Journal said.
The lender said it was conducting a national campaign between January and 2024 to crack down on money laundering.
This was China’s latest probe on the internet industry after already taking “hundreds of billions of dollars” from areas such as ride-hailing, e-commerce and online education, Yahoo Finance said.
The irregularities were discovered late last year during a routine check, WSJ said, with regulators currently deciding if the fine should be as big as hundreds of millions of yuan.
President Xi Jinping’s administration was concerned about Tencent’s “disorderly expansion of capital,” while WeChat faced questions from regulators regarding its enclosed internet ecosystem that covers online payments, e-commerce and short videos, to name a few.
Last Year, WeChat Pay, the company's mobile payment and digital wallet service, handled roughly 40% of China’s mobile payments, second only to Alipay.