Shanghai halts Ant’s blockbuster IPO over listing requirements
Insurgent financial service also suspends listing on HK exchange
Ant Group challenged China’s state-dominated banking system by bringing easy-to-use payments, borrowing and investing to hundreds of millions of smartphones across the country. On Tuesday, Chinese officialdom reminded the company who was really in charge.
In a late-evening announcement that stunned China, the Shanghai Stock Exchange slammed the brakes on Ant’s initial public offering, which was set to be the biggest stock debut in history with investors on multiple continents and at least $34 billion (U.S.) in proceeds.
The stock exchange’s notice to Ant said that the company’s proposed offering might no longer meet the requirements for listing after Chinese regulators had summoned company executives, including Jack Ma, the co-founder of the e-commerce titan Alibaba and Ant’s controlling shareholder, for a meeting Monday.
Neither the regulators nor Ant have said in detail what was discussed at the meeting. But the timing of the conversation, mere days before Ant’s shares were expected to begin trading concurrently in Shanghai and Hong Kong, suggested discord with the company or with Ma, who spun Ant out of Alibaba in 2011.
Although he is not part of Ant’s management, Ma has been a spirited champion for the company’s mission of bringing financial services to small businesses and others in China who he says have been ill-served by stodgy, government-run institutions.
Shortly after the Shanghai exchange’s announcement, Ant said it was suspending the Hong Kong leg of its listing as well. The company apologized to investors “for any inconvenience.”
“We will keep in close communications with the Shanghai Stock Exchange and relevant regulators,” the company said, “and wait for their further notice with respect to further developments of our offering and listing process.”
Shares of Alibaba, a major Ant shareholder, fell more than six per cent on the New York Stock Exchange on Tuesday morning after news of the delay.
In another sign of the continuing scrutiny, the nation’s banking regulator, the China Banking and Insurance Regulatory Commission, on Monday issued new draft rules for online microfinance businesses. Among them were higher capital requirements for loans and tighter controls on lending across provincial lines.