Market debut of Chinese e-finance giant Ant Group postponed

In this file photo, the figure of Ant Group's mascot is displayed at the Ant Group office in Hong Kong. — AP
In this file photo, the figure of Ant Group’s mascot is displayed at the Ant Group office in Hong Kong.

The planned stock market debut of the world’s biggest online finance company,
Ant Group, was suspended in Shanghai and Hong Kong on Tuesday, disrupting
a record-setting $34.5 billion initial public offering that highlighted China’s
recovery from the coronavirus pandemic.

The Shanghai stock exchange cited regulatory changes in Ant’s industry
and a possible failure to meet disclosure requirements but gave no details.
Ant said later it would suspend its Hong Kong debut due to the Shanghai
suspension. Shares were to have started trading on both exchanges on Thursday.

The suspension followed a Monday meeting between regulators and
Ant executives including founder Jack Ma, China’s richest entrepreneur.
Ma also founded Alibaba Group, the world’s biggest e-commerce company
by sales volume, which spun off its Alipay payments service to create the
company that became Ant Group.

Views regarding the health and stability of the financial sector were exchanged,
Ant Group said in a prepared statement. The company said it was committed to
implementing the meeting opinions but gave no details.

We will continue to improve our capabilities to provide inclusive services and
promote economic development to improve the lives of ordinary citizens, the company said.

Ant apologised to investors and said it would wait for notice from regulators
about further developments. US shares of Alibaba tumbled more than 8pc on
Tuesday at the opening bell, matching the company’s largest percentage
decline since its first day of trading on the New York Stock Exchange.

Ant operates Alipay, the world’s biggest financial technology company and, along with
Tencents WeChat Pay, one of two dominant electronic payment systems in China.

In a joint statement, the Chinese central bank, securities regulator and other agencies said
Monday they had regulatory interviews with Ma, Ant Group chairman
Eric Jing and president Hu Xiaoming.

It was hoped that Ant’s debut would put a spotlight on the economic rebound of
China, the first major economy to return to growth after the coronavirus pandemic began last December.

The decision to go public on exchanges in both Shanghai and Hong Kong reflected
the evolving nature of China’s fast-growing financial markets and their relationship
to fledgling private sector corporate giants such as Ant and Alibaba.

Mainland markets are off-limits to most foreign investors and until recently were used
mostly to raise money for state-owned industry. Private sector companies and those that
wanted access to foreign investors sold shares in Hong Kong, New York or other offshore centers.
Alibaba went public in New York rather than on a mainland exchange.

More recently, the ruling Communist Party has been encouraging use of mainland markets
to raise money for private sector companies that generate most of China’s jobs and wealth
and to give Chinese investors a chance to profit from their growth.

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