Ant delays float after talks with regulators
Fintech giant Ant Group’s blockbuster initial public offering in Shanghai and Hong Kong has been postponed, less than 48 hours before the highly anticipated start of trading.
After joint talks with regulators, some major changes, including changes of regulation on the fintech industry, may result in a failure of meeting IPO standards or information disclosure requirements, therefore, Shanghai Stock Exchange decided to postpone the listing of Ant, which was scheduled for tomorrow, SSE said in the notice last night.
Less than an hour later, Ant announced the suspension of its listing in Hong Kong.
The postponement came just one day after China’s top financial regulators conducted a rare joint regulatory talk with Ant’s co-founder Jack Ma, Chairman Eric Jing, and Chief Executive Simon Hu on Monday.
The record-setting US$34.5 billion IPO faces regulatory risks since China is tightening regulation over online lenders. China’s banking and insurance regulator on Monday posted draft rules on small loan lenders, putting limits on their operating areas, leverage and licenses.
Ant Group apologized to investors in a statement and said it will “properly handle follow-up matters in accordance with applicable regulations of the two stock exchanges.”
Ant is the parent company of China’s largest mobile payments business Alipay, which has over 700 million monthly active users in the country.
The suspension is to better protect investors and ensure the long-term healthy development of the market, China's national newspaper Economic Daily reported on Tuesday evening in a commentary.
Following the principles of openness, fairness and justice, regulators are solving the problems in the capital market, the report said.
The listing of Ant involves millions of investors and it is the regulators' duty to protect the legitimate rights and interests of investors, the report said, noting the suspension is made in accordance with the regulation requirements of registration-based IPO system, requiring companies to make practical moves in information disclosure.
The suspension made a clear signal to the markets that the registration-based IPO system has supervision for each step and everyone must respect the rules, the report said, "There is no exception."
In fact, only better protection of investors could ensure more support for listed companies of good quality, as well as a sound development of China's capital market, the report said.