£26.5bn market debut of Chinese e-finance giant Ant postponed

The planned stock market debut of the world’s biggest online finance company, Ant Financial, has been suspended in Shanghai and Hong Kong, disrupting a record-setting 34.5 billion dollar (£26.5 billion) initial public offering that highlighted China’s recovery from the coronavirus pandemic.

Management of the Shanghai stock exchange cited regulatory changes in Ant’s industry and a possible failure to meet disclosure requirements, but offered no details. The Hong Kong exchange followed suit several minutes later.

The suspension comes after a Monday meeting between regulators and company executives, including Ant founder Jack Ma, China’s richest entrepreneur.

The market debut of Ant, spun off from Mr Ma’s e-commerce company Alibaba Group, highlighted the rebound of China, the first major economy to return to growth after the pandemic began last December.

5th Annual Asian Awards – The Grosvenor House Hotel
Jack Ma, winner of Entrepreneur of the Year at the 2015 British Asian Awards at the Grosvenor House Hotel, London.

Ant operates Alipay, which is the world’s biggest financial technology company and one of two dominant electronic payment systems in China, alongside Tencent’s WeChat Pay.

In a joint statement, the Chinese central bank, securities regulator and other agencies said they had “regulatory interviews” with Mr Ma, Ant Group chairman Eric Jing and president Hu Xiaoming.

Neither side disclosed details of the meeting.

“Views regarding the health and stability of the financial sector were exchanged,” Ant Group said in a prepared statement.

The company said it was “committed to implementing the meeting opinions” but gave no details of what instructions the executives received.

“We will continue to improve our capabilities to provide inclusive services and promote economic development to improve the lives of ordinary citizens,” the company said.

Mr Ma founded e-commerce giant Alibaba in 1999 to help match Chinese wholesalers with foreign retailers. Alipay was created to facilitate payments in an economy where few people had credit cards.

Alibaba owns a third of Ant Group and spun off Alipay in 2011. The company was later rebranded as Ant as the company branched into lending and other financial services.

Ant Group’s shares were due to begin trade in Hong Kong and Shanghai on Thursday after it raised at least 34.5 billion dollars. Retail investors in Shanghai placed bids for nearly 3 trillion dollars (£2.3 trillion) worth of shares.

The company has come under increased scrutiny and tighter regulation as it expanded the range of financial technology services it offers. Among the new regulations are caps on the use of asset-backed securities to fund consumer loans, new capital and licensing requirements and caps on lending rates.

On Monday, the central bank raised the registered capital requirement for lenders such as Ant to a minimum of 5 billion yuan (£575 million).

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