Explainer | How an avalanche of rules buried Ant Group’s US$39.5 billion stock sale and looks set to reshape China’s fintech landscape
- Ant Group will need months at least to assess the fallout from the regulatory shift, make the business compliant with new rules and update potential investors
- We lay out a timeline of the key events leading up to China halting Ant’s IPO in Shanghai and Hong Kong at the eleventh hour
When internet billionaire Jack Ma walked out of a meeting with the top echelons of China’s regulators on November 2, his hopes of dramatically overhauling financial services in the world’s second-largest economy had just taken a heavy blow.
The regulators told Ma that in the future, greater financial inclusion driven by internet platforms would take a back seat to financial stability and protecting traditional lenders, which are still important policy levers in the developing economy.
Ant executives had sought to gold-plate the firm’s fintech business model by obtaining sign-off on a prospectus for a US$39.5 billion listing plan (including an overallotment option) from the highest regulatory levels only weeks earlier.
The IPO would have pegged Ant’s worth at a stunning US$359 billion, higher than the world’s largest bank, JP Morgan, and bigger than the state-backed Industrial and Commercial Bank of China (ICBC). China feared the privately run company, which was on the cusp of bringing more foreign investors into its capital structure, had become too big to fail.