China forces billionaire to suspend £26billion stock market launch

China forces billionaire Jack Ma to suspend £26billion stock market launch for Ant Group as Beijing tries to maintain grip on financial tech sector

  • Firm has suspended its record-breaking listing in both Shanghai and Hong Kong
  • Regulators ordered it to postpone amid concern it would not meet requirements
  • Ant Group’s Alipay has revolutionised commerce with app used to pay for goods

China has forced billionaire Jack Ma to suspend a £26billion stock market launch for Ant Group as Beijing tries to maintain its grip on the financial tech sector.

The firm has suspended its record-breaking listing in both Shanghai and Hong Kong, originally set to take place this week, the company said in a filing Tuesday.

Chinese regulators ordered it to postpone amid concerns it would not meet listing requirements. 

Ant Group’s Alipay platform has helped revolutionise commerce and personal finance in China, with consumers using the smartphone app to pay for everything from meals to groceries and travel tickets. 

But the firm, which has more than 700 million monthly active users, has also caused concern in China’s state-controlled finance sector by venturing into personal and consumer lending, wealth management and insurance.

China has forced billionaire Jack Ma (pictured) to suspend a £26billion stock market launch for Ant Group as Beijing tries to maintain its grip on the financial tech sector 

The Shanghai stock exchange issued the surprise order due to ‘major issues such as changes in the financial tech supervisory environment’, the exchange said in a separate statement.

The shock announcement sent the New York-listed shares of affiliated e-commerce titan Alibaba plunging by as much as nine per cent as the US markets opened earlier today.

The suspension comes after co-founder Jack Ma, Ant Group chairman Eric Jing, and chief executive Simon Hu were summoned to an unusual meeting with regulators on Monday. 

Meanwhile, state media have recently issued warnings about potential financial instability that could result from Ant Group’s rapid growth.

It also follows new state regulations issued to contain potential risks in China’s growing online lending industry, a sector Ant Group has aggressively moved into.

China’s regulators are ‘attempting to maintain control over a financial tech sector that is already huge, profitable, and rapidly evolving,’ according to Brock Silvers, chief investment officer at Kaiyuan Capital.

State media have recently issued warnings about potential financial instability that could result from Ant Group’s rapid growth

Ma, one of China’s richest and most powerful business figures as well as Ant Group’s controlling shareholder, has faced state media criticism for comments in late October in which he boasted of the size of the stock market launch and appeared to criticise regulators for stifling financial tech innovation.

A Sunday commentary in the state-controlled Financial News warned of internet giants like Ant Group getting too big, saying any resulting systemic problems ‘will lead to serious risk contagion’.

The state-owned Economic Daily newspaper responded Tuesday to the suspension calling it a demonstration of regulators’ determination to ‘safeguard the interests of investors’.

‘Those who try to subvert the existing system will certainly offend the vested interests just like taxi drivers do not like Uber,’ said Ivan Li, investment research director of CSL Securities in Hong Kong.

Ant said in a separate social media post Tuesday that it ‘sincerely apologises… for any inconvenience caused by this development’, adding that it would cooperate with regulators.

The share sale was set to beat the $29billion (£22.2billion) chalked up by previous record-holder Saudi Aramco last December.

The Hong Kong Stock Exchange said Tuesday it had been notified by Ant of the suspension but would not comment on specific listings.

Beijing has called on national flagships of the tech sector to list on domestic stock exchanges rather than fundraise in the US, in a period of sharp economic and political rivalry.

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