China suspends Ant Group’s record IPO

4 Nov 2020

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Chinese fintech giant Ant Group was due to make its stock market debut this week, but authorities have cited ‘major issues’.

Ant Group’s debut listing on the stock market this week was set to become the world’s largest IPO.

However, on 3 November, two days before the fintech company was due to be listed, the Shanghai Stock Exchange said it would suspend the listing.

In a statement, Shanghai Stock Exchange cited “major issues” such as changes in the financial technology regulatory environment. It also mentioned that Ant Group co-founder Jack Ma, executive chair Eric Jing, and CEO Simon Hu had been summoned and interviewed by regulators.

“This material event may cause your company to fail to meet the issuance and listing conditions or information disclosure requirements,” the statement continued.

Ant Group is China’s largest fintech. It runs Alipay, the main online payment system in China, which has reportedly become the largest payments business in the world, with more than 730m monthly users and $17tn of transactions processed in the year ending in June. The business was originally founded as part of Ma’s Alibaba Group, but was spun out in 2014.

Before the stock market listing was suspended, it was set to sell shares worth more than $34bn on the Shanghai and Hong Kong stock markets, which would have made it a record-breaking IPO.

According to BBC News, Ant Group was only selling about 11pc of its shares in the upcoming IPO, but the pricing would value Ant Group at about $313bn.

News of the listing’s suspension had a knock-on effect for Alibaba, which owns a roughly 33pc stake in Ant Group. Alibaba’s Hong Kong-listed shares fell by more than 7pc today (4 November).

In a statement, an Ant Group spokesperson apologised to investors for the suspension of its IPO. “We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges,” it said.

“We will keep in close communications with the Shanghai Stock Exchange and relevant regulators and wait for their further notice with respect to further developments of our offering and listing process and disclose in a timely manner.”

Jenny Darmody is the editor of Silicon Republic