The mega IPO of Ant Group has been suspended by the Chinese authorities.
Announced at the end of October, it was supposed to be the largest-ever IPO in the world, with the aim of raising more than $34 billion in one fell swoop.
It was supposed to be launched in two days on the Shanghai and Hong Kong stock exchanges, but the Chinese authorities questioned Jack Ma and other company executives and decided to suspend it temporarily.
The fact is that, according to financial market regulators, the company should be subject to more controls, so much so that it should be subject to the same capital and leverage restrictions as banks.
In order to carry out these additional controls, it has been decided to suspend the IPO until a date to be set.
The Shanghai Stock Exchange has issued a statement that Ant Group’s listing is blocked because it does not meet disclosure requirements due to recent changes in the regulatory environment in fintech.
According to the Chinese People’s Daily, Ant Group must restructure in accordance with the requests of the supervisory authorities, if it wants to re-propose its IPO.
Why was the ANT IPO suspended?
For the time being, there are not many more details on this issue.
It should be noted that at the end of October, Jack Ma had strongly criticized banks and regulators, accusing them of stifling innovation, such as cryptocurrencies.
The encounter with regulators and the central bank took place after the publication of these criticisms.
It is unclear whether the authorities’ decision was a consequence of the criticism, or whether his critical stance was motivated by the awareness that the IPO would be blocked anyway, but the two are unlikely to be unrelated.
The shares of Alibaba, a company founded by Jack Ma within the group and the first to hold 33% of the Ant shares, have suffered a heavy loss today, going from around $310 to $291 in just a few minutes, then dropping to $281 and bouncing back to $285.