By
Chimamanda U. Martha
September 18th, 2023
As internal sources said, the fintech giant would face scrutiny as well as restrictions on capital and leverage similar to banks.
Chinese fintech giant and Alibaba‘s affiliate Ant Group is nearing its historic IPO. The company is just days before the start of public trading of its stock. And amid the event, its co-founder Jack Ma and senior executives were summoned by Chinese regulators for talks. According to those familiar with the matter, Jack Ma got a warning on Ant Group’s IPO and may face new limits on the way to expansion.
The meeting included representatives from the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange (SAFE), the currency regulator. Neither Ant Group nor the regulators revealed what was the subject of the meeting. However, internal sources said the fintech giant would face scrutiny as well as restrictions on capital and leverage similar to banks.
Ant Group stated:
“On November 2, 2020, Ma as controlling shareholder of Ant Group and Ant’s management team met with Chinese financial regulators. Views regarding the health and stability of the financial sector were exchanged.”
The company further added:
“Ant Group is committed to implementing the meeting opinions in depth and continuing our course based on the principles of: stable innovation; embrace of regulation; service to the real economy; and win-win cooperation. We will continue to improve our capabilities to provide inclusive services and promote economic development to improve the lives of ordinary citizens.”
Chinese financial regulators have not provided any comments.
Ant Group’s Mega IPO
Ant Group first applied for a dual listing in Hong Kong and Shanghai in August. At that time, Ant explained that with the dual listing, it hoped to fund domestic and global expansion. In September, the company won approval from Shanghai’s Star Market. In October, it received the green light from the Hong Kong stock exchange.
With support from Jack Ma, Ant Group was planning to make new records on charts. It raised over $34.5 billion in Hong Kong and Shanghai. Besides, the company recorded a huge retail investors bid of $3 trillion which equals the Gross Domestic Product (GDP) of the UK. Ant Group’s shares are due to start trading simultaneously in Shanghai and Hong Kong on November 5 in a $39.67 billion stock sale.
Analysts are expecting Ant Group’s IPO to become the largest public offering of all time. However, seems the IPO will bring regulatory issues to Ant Group’s Jack Ma. China aims to tighten supervision over online lenders and companies that operate across multiple financial business lines. Earlier, Chinese authorities published draft rules on the use of asset-backed securities to fund quick consumer loans. And Ant Group, as well as other similar organizations, has to try hard to meet all the regulators’ requirements.