China suddenly suspended the $37bn (£28.5bn) listing of Ant Group on Tuesday (3 November), after billionaire founder Jack Ma was called to a meeting with financial regulators.
The Ant Group IPO this week was gearing up to become the biggest in history when it listed on the Shanghai STAR Market tech exchange and Hong Kong exchanges. Ant then put the Hong Kong part of the listing on hold after Shanghai suspended its IPO.
The Shanghai exchange said in a statement that there had been “major issues such as changes in the regulatory environment.”
“This major event may cause your company to fail to meet the issuance and listing conditions or information disclosure requirements,” the statement said.
State media in China on Wednesday described the sudden suspension of the listing as “reasonable” and “necessary”. Sources told Reuters that Ma had been informed by regulators that Ant’s online lending business would face stricter scrutiny.
Ma had criticised China’s finance and regulatory system at an event in October, noting that it stifled innovation, which according to Reuters sources, is believed to have riled Chinese regulators.
Ma, who also founded Alibaba, had reportedly wanted Ant to be handled as a tech company rather than a financial company with tighter regulation. Ant, previously called Alipay, has become the biggest payments platform in the world since it was spun out in 2014.
“The Communist party has shown the tycoons who’s boss. This has gone from the deal of the century to the shock of the century,” Francis Lun, CEO of GEO Securities, told Reuters.
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