Pushing Pause: Ant Group Listing on Shanghai Exchange Postponed

Following a meeting with Chinese regulators, Ant Group’s listing on the Shanghai exchange has been postponed.

Poised to become the largest ever Fintech IPO at $34 billion, the hurdle is a disappointing twist for founder Jack Ma – one of the wealthiest entrepreneurs in the world. Ant Group is scheduled to trade on the Hong Kong Exchange as well.

In a report by Bloomberg, Ma and several executives met with regulators on Monday where they were informed that Ant Group will receive additional scrutiny – somewhat similar to banks. The meeting resulted in a “regulatory warning.” Ant Group reportedly responded with a statement indicating it will “implement the meeting opinions in-depth and follow guidelines including stable innovation, an embrace of supervision and service to the real economy.”

The same report said that official publications had lambasted Ant Group for straying from its core payments service while “misleading users to consume beyond their means.”

A second report from earlier today said that China had suspended the initial public offering citing “regulatory changes.”

Shares in Alibaba (NYSE:BABA) tanked on the news. Alibaba is a significant shareholder in Ant Group and stands to benefit from the IPO.

In many respects the last minute detour is shocking but China has shifted its regulatory approach dramatically in the past. China was once the largest peer to peer lending market in the world  with thousands of platforms operating in the country. Today, the P2P sector is a pale ghost of the past. Rampant fraud compelled regulators to clamp down on the industry forcing most of the platforms to close down.

Ant Group (previously called Ant Financial) is best known for payments platform Alipay. Today, Ant Group includes online lending, banking, insurance, blockchain, and more. AliPay serves approximately 1.3 individuals worldwide.

 


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