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Tencent Tumbles on Charges of Money Laundering, Faces Record Fine

Published 03/14/2022, 05:27 AM
Updated 03/14/2022, 05:29 AM
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By Dhirendra Tripathi

Investing.com – Tencent Holdings stock (OTC:TCEHY) (HK:0700) closed nearly 10% lower in Hong Kong Monday on a report in The Wall Street Journal that the Chinese tech giant faces a potential record fine for violations of some central bank regulations by its WeChat Pay mobile network.

The violations relate to China’s anti-money-laundering rules. According to WSJ, there were also lapses in compliance with ‘know your customer’ and ‘know your business’ regulations – rules implemented by regulators the world over that require entities to verify the authenticity of the customer and their eligibility to undertake that transaction on the platform.

The breaches were discovered by the country’s central bank during a routine inspection that concluded in late 2021. Tencent’s mobile payments network was also found to have allowed the transfer and laundering of funds with illicit transactions such as gambling, the report said.

The impending penalty comes as Chinese fintech platforms prepare for tighter oversight of their business amid the government’s attempts to curb money laundering activities.

The Dutch-listed shares of Prosus (AS:PRX), the vehicle that holds South African giant Naspers' Tencent stake, were hurt too. They fell 11% in Amsterdam. NYSE-listed shares of Tencent Music Entertainment (NYSE:TME), a subsidiary, were down 5.2% in premarket trading.

 

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