China postpones colossal Ant IPO after closed-door discussion with Jack Ma

the Shanghai The exchange announced the postponement of Ant Group’s colossal IPO, a day after Chinese regulators weighed a series of new fintech rules and called Jack Ma and other top executives to a closed-door meeting.

The rare discussion between major Chinese financial regulators and Ant, which revealed “major changes in the regulatory environment for fintech,” could disqualify the company from listing on Nov. 5, the exchange said in a statement on the evening of. November 3.

It is not known what these “changes” are, although the exchange has ordered Ant to disclose them. It should be noted that at the end of October, Ma gave a provoke speech criticizing Chinese financial regulations. The conference brought together senior Chinese leaders and subsequently sparked widespread controversy.

Ant halted its initial public offering in Hong Kong, where it planned to simultaneously list, upon receipt of the Shanghai notice, the company ad in a report.

“We sincerely apologize for any inconvenience caused to investors. We will properly handle follow-up matters in accordance with the compliance regulations of both exchanges,” he said.

Ant has tried over the years to be in the good graces of the authorities. When that renamed Ant Financial to Ant Technology This year, the move was seen as an attempt to shed the company’s image as an intimidating financial giant and underscore that of a benevolent tech provider. The campaign started a few years ago, which prompted the company to design awkward coins like “techfin“(as opposed to” fintech “) and to declare it did not compete with traditional financial institutions, many of which were state-run.

The promises weren’t just a show. The ant slowly became a online market connect hundreds of millions of customers with financial products offered by traditional players. He is also brought in as shareholders of heavyweight state actors such as the National Social Security Fund and China International Capital Corporation, which are expected to reap good returns from their investments.

But the level of reassurance didn’t seem to be enough. Chinese financial authorities published a new wave of proposals on Monday to put the brakes on the fintech sector, days before Ant was due to lift $ 34.5 billion in the world’s largest public offering. The project, while not explicitly directed at Ant, coincided with the meeting of financial regulators with Ant executives.

“Views regarding the health and stability of the financial sector have been exchanged,” a spokesperson for Ant told TechCrunch earlier in a statement. “Group of ants undertakes to implement in depth the opinions of the meeting and to continue our journey on the basis of the principles of: stable innovation; adoption of regulations; service to the real economy; and win-win cooperation. “

The message was clear: Ant is working to respect Beijing’s wishes.

“We will continue to improve our capacities to provide inclusive services and promote economic development to improve the lives of ordinary citizens,” the company added.

The proposal was just the latest move in China’s continued effort to stabilize its burgeoning FinTech sector. The draft rules include a ban on interprovincial online lending, unless otherwise approved by authorities; a maximum online loan amount of 300,000 yuan ($ 45,000) for each individual; and a share capital threshold of 1 billion yuan for online microcredit lenders.

At stake is Ant’s booming lending business, which contributed 41.9 billion yuan or 34.7% of its annual revenue, according to the company’s IPO. prospectus. During the year ended June 30, Ant had worked with over 100 banks, distributing 1.7 trillion yuan ($ 250 billion) in consumer loans and 400 billion yuan ($ 58 billion) in consumer loans. small business loans.

Over the years, Chinese financial regulators have abandoned many other policies limiting the expansion and profitability of fintech players. For example, the payment service of Ant Alipay and its rivals could no longer generate lucrative interest returns from client reserve funds from last year.

The article was updated on November 3, 2020 with the announcement of Ant.

About Dawn Valle

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