In a major setback to billionaire Jack Ma's Ant Group, the Shanghai Stock Exchange has suspended the fintech giant's $34.5 billion initial public offering (IPO) on its STAR Market, which was slated to open on November 5. Backed by Chinese e-commerce giant Alibaba, Ant shares were set to list simultaneously on Hong Kong and Shanghai stock exchanges on Thursday.
The Chinese exchange said that Ant's listing on Shanghai STAR Market has been halted due to the company's inability to meet recent changes in the financial technology regulatory environment. The exchange, however, did not disclose further details.
The action has been taken after Chinese regulators held a meeting with Ant Group's co-founder Jack Ma, one of China's most powerful businessmen, and the company's chairman Eric Jing and its president Hu Xiaoming on Monday.
"This material event may cause your company to fail to meet the issuance and listing conditions or information disclosure requirements," Shanghai Stock Exchange said in a statement issued to Ant Group.
Earlier on Monday, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the Securities Regulatory Commission, and the State Administration of Foreign Exchange issued a statement, saying that they had conducted "regulatory interviews" with Ma, Ant Group Chairman Eric Jing, and its president, Hu Xiaoming.
Though the details of the meeting were not disclosed by the authorities or Ant Group, but such move by regulators is typically seen as a warning or dressing down of sorts.
The development comes just days before the company's shares were due to start trading in Hong Kong and Shanghai on Thursday, following a blockbuster IPO that was expected to be the world's largest. The company was expected to raise at least $34.5 billion, surpassing Saudi Aramco's $29.4 billion listing last December.
Chinese fintech major Ant Group is 33 per cent owned by Jack Ma-led e-commerce giant Alibaba Group Holding. It operates Alipay, the world's largest and most valuable financial technology company and one of two dominant Chinese digital wallets in China, the other being rival Tencent's WeChat Pay.
The company has come under increased scrutiny and tighter regulation as it expanded the range of financial technology services it offers. Among the new regulations are caps on the use of asset-backed securities to fund consumer loans, new capital and licensing requirements and caps on lending rates. On Monday, the Chinese central bank raised the registered capital requirement for lenders like Ant to a minimum of 5 billion yuan ($747 million).
By Chitranjan Kumar with PTI inputs