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HONG KONG (Reuters) – Ant Group’s $ 37 billion listing was suspended in both Shanghai and Hong Kong in a dramatic move just two days ahead of what was slated to be the world’s largest stock market debut.
The Shanghai Stock Exchange first announced that it had suspended Ant’s initial public offering on its STAR market, prompting Ant to also freeze the Hong Kong leg of double listing.
Ant said its listing had been suspended by Shanghai following a recent interview that regulators held with founder Jack Ma and top executives.
He said that it may not meet listing ratings or disclosure requirements, and also cited recent changes in fintech’s regulatory environment.
Shanghai described Ant’s meeting with Chinese financial regulators as a “major event.”
Ant was to go public in Hong Kong and Shanghai on Thursday after raising about $ 37 billion, including the domestic arm’s greenhoe option, in a record public sale of shares.
“This is a curve ball that has been thrown at us … I don’t know what to say,” said a banker who works at the IPO.
Regulators had summoned Ma, Ant CEO Eric Jing, and CEO Simon Hu to a meeting Monday when they were told the company’s lucrative online loan business faced stricter government scrutiny. sources told Reuters.
The meeting came when the Chinese authorities published a new draft of rules for online microloans.
In late October, Ma had called financial regulation outdated and unsuitable for companies trying to use technology to drive financial innovation.
But Beijing has become more uncomfortable with banks largely using microlenders or third-party tech platforms like Ant to underwrite consumer loans, amid fears of rising defaults and deteriorating asset quality in a economy hit by a pandemic.
Shares of Ant’s subsidiary Alibaba Group fell 8.6% in pre-market trading following news of the Shanghai Stock Exchange suspension of Ant’s A-share IPO.
(Reporting by Meg Shen and Julie Zhu; Additional reporting by Scott Murdoch and Alun John in Hong Kong; Cheng Leng and Yingzhi Yang in Beijing; Written by Brenda Goh; Edited by Louise Heavens and Pravin Char)
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