Shanghai Stock Exchange Holds Up Ant Group IPO Following Regulators’ Questioning
The Shanghai Stock Exchange is delaying Ant Group’s record initial public offering (IPO) following Jack Ma’s meeting with Chinese regulators, according to a Wall Street Journal (WSJ) report on Tuesday (Nov. 3).
That meeting now disqualifies Ant from listing on Thursday (Nov. 5) as originally planned, according to a statement from the exchange, per the WSJ. The latest developments have to first be disclosed to investors, the exchange said.
Several regulatory agencies — the People’s Bank of China (PBOC), Insurance Regulatory Commission, the Securities Regulatory Commission and the State Administration of Foreign Exchange — summoned Ma, the controlling shareholder in Ant Group, on Monday (Nov. 2) to answer questions behind closed doors. Also summoned were Ant Group Chairman Eric Jing and Chief Executive Simon Hu.
Last month at the Bund Summit in Shanghai, Ma gave a speech that admonished Chinese regulators for interfering too much with FinTech and banking. More than 5 million people made orders in Shanghai for stock. It is estimated that Ant will be valued at approximately $316 billion after the IPO.
Ant calls itself a tech company, but financial regulators are thinking otherwise, even though Ma has emphasized again that the company is not a bank. By avoiding the title of financial institution, Ant gets a tech company’s valuation and attracts more investors.
Some critics have pointed to the fact that Ant just changed its name in 2020 from Ant Financial. Ant was founded in 2004 as Alibaba’s payments processor.
The IPO is expected to raise $34.4 billion, topping the record for the largest filing by Saudi Aramco for $29.4 billion in 2019.
Ant’s double IPO is scheduled to be listed in Shanghai and Hong Kong.
Ant Group said its Hong Kong listing would be suspended as well, and that it would return funds to investors who subscribed to the IPO, according to the WSJ.