Shenzhen

TENCENT Holdings faces a record fine after China's central bank discovered its WeChat Pay had violated money-laundering rules, the Wall Street Journal reported, citing people familiar with the matter.

The People's Bank of China found Tencent's payments platform had allowed the transfer of funds for illicit purposes such as gambling, the newspaper reported. WeChat Pay was also judged non-compliant with other rules that required Tencent to identify users and merchants transacting on the platform, the Journal said.

A probe into potential money-laundering would open a new front in Beijing's sweeping crackdown on the internet industry, an effort that's already wiped out hundreds of billions of dollars in arenas from ride-hailing and e-commerce to online education. Tencent itself has thus far mostly escaped formal regulatory action.

Tencent's investment arm could be impacted as President Xi Jinping's administration grows wary of what it deems a "disorderly expansion of capital", while WeChat has drawn scrutiny from regulators for building an enclosed internet ecosystem that spans everything from e-commerce to short videos and online payments. BLOOMBERG