Tencent may receive "record" fine for banking regulation violations
Chinese technology and entertainment conglomerate Tencent may receive a "record" fine for violating regulations relating to anti-money laundering, as reported by The Wall Street Journal.
The background: Firstly, let's establish just how big a player Tencent truly is in the gaming industry.
- Tencent owns 100% of Riot Games, the developer behind League of Legends, VALORANT, Wild Rift, and other popular gaming titles.
- The Chinese conglomerate also has an 81.4% stake in Clash of Clans and Brawl Stars developer Supercell, 40% in Fortnite developer Epic Games, 18.7% in Garena publisher Sea, 5% in Assassin's Creed and Rainbow Six developer Ubisoft, and 5% in Activision Blizzard (which may well be acquired by Microsoft for almost $69B).
The penalty: The potential fine could reportedly be, at least, hundreds of millions of yuan.
- WSJ has reported that the fine the company may be facing is due to the violation of central bank regulations on its mobile network WeChat Pay.
- It's reported that financial regulators found that the network had broken China's rules against money laundering and failed to comply with "know your customer" and "know your business" regulations.
- The People's Bank of China discovered the alleged violations in late 2021, according to the report, and it's also stated that WeChat Pay has been found to have permitted the transferring of funds and laundering through gambling.
- At the time of publication, shares in Tencent have dropped 10.79% in value on the London Stock Exchange following the report. Likewise, shares are down 9.79% on the Hong Kong Stock Exchange following the story.