Cinda Asset Management has unexpectedly withdrawn from the recapitalisation of Chongqing Ant Consumer Finance barely three weeks after announcing it, adding a surprising twist to the restructuring of China’s largest fintech company. Cinda said its board decided “not to participate” in the plan to pay 6 billion yuan (US$943 million) for an additional 20 per cent stake in Chongqing Ant, according to a filing to the Hong Kong stock exchange signed by the bad-loans manager’s chairman Zhang Zi’ai. “After further prudent commercial consideration and negotiation with the target company, [Cinda] proposed not to participate in the share subscription,” the company said, without naming Chongqing Ant. The Beijing-based company, set up in 1999 to manage the bad loans of China Construction Bank, did not say why it withdrew from the December 24 plan. Cinda owned 15 per cent of Chongqing Ant through its wholly owned unit Nanyang Commercial Bank as of June 2021, according to regulatory filings. Chongqing Ant is a consumer finance company 50 per cent owned by Ant Group , the world’s largest fintech company and an affiliate of this newspaper’s owner Alibaba Group Holding . It houses the two consumer credit services Huabei and Jiebei, which provide small loans to online shoppers and merchants. Ant Group had been undergoing a restructuring and review of its myriad businesses ever since its US$39.7 billion initial public offering (IPO) was foiled in November 2020 days before shares were due to commence trading in Shanghai and Hong Kong. Cinda’s withdrawal reverberated throughout the deal, causing Jiangsu Yuyue Medical Equipment & Supply to defer its 1.1 billion yuan plan to raise its stake in Chongqing Ant, according to a statement to the Shenzhen stock exchange that cited Cinda’s decision. Sunny Optical Technology Group followed with a statement about postponing its subscription to 6 per cent of the enlarged shares of Chongqing Ant, saying that it would disclose “when the revised proposal of capital increase of [Chongqing Ant] has come up and further assessment of such proposal has been made.” Chongqing Ant “fully respects the business decision made by its investor,” the company said in a statement, adding that it would “actively hold discussions with investors, continue to finalise the capital increase proposal as soon as possible in accordance with market principles, and ensure the rectification work on the consumer finance business is effectively carried out”. Redefining fintech In its announcement last Christmas Eve, Cinda had agreed to raise its stake in Chongqing Ant, part of the plan to raise Chongqing Ant’s capital base to 30 billion yuan from 8 billion yuan. Ant Group would continue to hold 50 per cent of Chongqing Ant in the restructuring of Jack Ma’s fintech empire under regulatory oversight. Ant Group was required to bring its microcredit and consumer loan businesses under regulatory oversight after its dual listing was called off. Chongqing Ant was created to take over its Huabei and Jiebei businesses and the vehicle is expected to complete the process within a year, according to a statement from the Chongqing financial regulator in June 2021.