Debut of Chinese e-finance giant derailed by risk fear

BEIJING — The world’s biggest online finance company was racing toward a stock market debut when it was derailed by Beijing’s anxiety about risks in the fledgling industry, jarring global investors and deepening uncertainty about China’s financial markets.

Regulators suspended Ant Group’s record-setting $ 34.5 billion stock offering two days before trading was due to start in order to “maintain the stability of the capital market” and protect investors, a foreign ministry spokesman, Zhao Lijian, said Wednesday.

Zhao gave no details, but finance experts said the ruling Communist Party is worried the company might be unable to manage financial risks leaders want to contain as China tries to get economic growth back on track after the coronavirus pandemic.

The planned market launch of Ant, spun off from Alibaba Group, the world’s biggest e- commerce company by sales volume, symbolized China’s rebound and added to a string of smaller offerings by biotech and other new companies. In an unusual move, it was due to trade in both Shanghai for mainland investors and in Hong Kong for international buyers.

A brief official announcement Tuesday cited regulatory changes. It gave no details, but authorities have tightened controls on lending by online finance platforms and raised the amount of capital they must have.

The abrupt action might make investors more cautious about China, said Shaun Rein of China Market Research Group in Shanghai, whose clients include hedge funds and institutional investors. He said they are left to wonder whether regulators were worried about risks or acted out of irritation at Ant founder Jack Ma, China’s richest entrepreneur, who publicly complained they hamper innovation.