Mobile payment giant Alipay was removed from a high-tech company list in Shanghai, Bloomberg reported.
According to a government notice on Sept. 8, the report said that the removal could revoke certain tax benefits because Alipay.com did not meet the spending requirement for research and development.
A statement from the company said that the company dedicated over 18.8 billion yuan $2.6 billion for research last year.
It is noteworthy that Alibaba Group Holding Ltd's BABA affiliate Ant Group underwent a major restructuring in order to address Chinese government concerns that botched its $37 billion IPO plans in late 2020. In June, it appointed Hong Kong Exchanges and Clearing chairman Laura Cha as an independent director.
The initial public offering of Ant had been trimmed by global investors. Fidelity Investments slashed its estimate for Ant to $70 billion at the end of May from $78 billion in June 2021.
BlackRock, Inc. BLK reduced its value to $151 billion as of March from $174 billion, while T Rowe Price Group, Inc. TROW trimmed it to $112 billion as of May, down from $189 billion in 2021.
The company is going to lose some tax benefits because of the impact, according to Francis Chan, a Bloomberg Intelligence analyst. According to the report, China is placing more emphasis on chip self-sufficiency when it comes to high-tech development.
The price action of Alibaba was 0.77% less in Hong Kong on Thursday.