The IPO has additionally been suspended in Hong Kong, in keeping with a press release from Ant Group, which referenced the assembly between Ma and Chinese officers in addition to “recent changes” in laws. In a press release on its official WeChat account, Ant Group apologized to buyers for “any inconvenience caused by this development.”
This is the primary time that Chinese regulators have taken such drastic actions on the eve of a giant IPO, senior geotechnology analyst at Eurasia Group Xiaomeng Lu advised CNN Business.
“Jack Ma’s aggressive comments last weekend exacerbate the brewing conflict between large Chinese tech companies and powerful regulators,” Lu mentioned in emailed feedback. “Ant is likely to adjust its IPO valuation as a result of this intervention and delay its launch date.”
Duncan Clark, the creator of “Alibaba: The House that Jack Ma Built” and chairman of funding advisory agency BDA China, mentioned earlier than the IPO was halted that Chinese regulators “want to put out statements that they’re the ones in charge, the ones in control. No regulator anywhere wants to be irrelevant,” he mentioned.
On Monday, the China Banking and Insurance Regulatory Commission — one of many regulators that summoned the Ant executives — proposed new guidelines for on-line lenders. The guidelines might might imply that Ant must put aside additional cash for the loans it facilitates and would place extra credit score danger on its steadiness sheet, in keeping with Bernstein analyst Kevin Kwek.
While it isn’t but clear precisely why the Ant Group IPO was suspended, it might be an try by Beijing to remind Ma “who calls the shots,” Clark advised CNN Business on Tuesday. Still, such a dramatic transfer so near the itemizing date is shocking as a result of it might harm to Beijing’s drive to develop its capital markets, he added.
Ant Group mentioned on Tuesday that it could keep in “close communications” with regulators and the Shanghai change.
“We will overcome the challenges and live up to the trust on the principles of: stable innovation; embrace of regulation; service to the real economy; and win-win cooperation,” the corporate mentioned in its assertion. “We will continue to serve small and micro businesses and ordinary citizens with our passion, professionalism and commitment for society.”
— Laura He, Steven Jiang, Hanna Zhang and Shanshan Wang contributed reporting.