(Yicai Global) March 12 -- A unit of Hundsun Technologies Inc., indirectly owned by Alibaba Group Holding Ltd. CEO Jack Ma, may go bankrupt due to its inability to pay a CNY440 million (USD69 million) fine imposed by the China Securities Regulatory Commission.

Financial software developer Hangzhou Hundsun Network Technology Services Co. is unable to operate normally and its bank deposits have been frozen, online media outlet Jiemian News reported.

Hundsun Network was fined by the CSRC in November for violating securities law in a widely-reported case. Parent company Hundsun Technologies reportedly would prefer to let the unit go bankrupt, a company insider said.

The firm was penalized for engaging in illegal securities, with CNY109.86 million in illegal earnings confiscated and a fine of CNY329.6 million imposed. The commission also issued a warning to Liu Shufeng, the company's president, and Xiao Lan, its chief executive, who both received fines of CNY300,000.

Alibaba's payments affiliate Ant Financial Services Group, whose actual controller is Jack Ma, owns a 100 percent stake in Hangzhou Hundsun Electronics Group via Zhejiang Rongxin Network Technology Co. Hangzhou Hundsun Electronics owns a 20 percent stake in Hundsun Network.

Hundsun Network can either deal with the huge fine by either letting its parent pay for it or by filing for bankruptcy, insiders say. Hundsun Technologies posted an expected net profit between CNY450 million and CNY510 million for last year. However, full-year net profit was only CNY18.29 million in 2016, its annual report said.

Hundsun Technologies would prefer to let Hundsun Network go bankrupt, an anonymous insider from the parent company said. "Hundsun Network has no quality assets, except the financial investment platform HOMS, and has little revenue," he said, adding that the HOMs system led to major troubles during the 2015 stock market rout and was banned," Jiemian News quoted the insider as saying.