Ant Group’s record USD 37 billion listing has been stopped by Chinese authorities.
The Shanghai stock exchange decided to suspend the listing following a meeting between China’s financial regulators and Ant executives, who were told the company’s lucrative online lending business would face tighter scrutiny, sources told Reuters.
The last-minute regulatory decision could hit the financial technology giant’s growth prospects and cut into its valuation. The move to suspend Ant’s IPO was seen as a stunning rebuke for billionaire Jack Ma. According to Reuters, Ant’s enormous heft and Ma’s recent criticism of global financial regulations put him on a collision course with China’s top regulators.
Analysts pointed to a consultation paper issued by the People’s Bank of China and the China Banking and Insurance Regulatory Commission on 2 November 2020 that recommends the tightening of regulations for online micro-lending companies. Thus, regulators were aiming to level the playing field for fintech players and traditional financial institutions, and Ant will be required to have more registered capital for its consumer credit business.
Still, investors expect the dual Hong Kong and Shanghai listing to be delayed and not completely derailed.
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