Thursday, 29 July 2021

ANT Group's record breaking $34.5 billion IPO hits regulatory snag

By Editorial

ANT Group's record breaking $34.5 billion dual listing in Shanghai and Hong Kong has been suspended as senior management team including founder, Jack Ma, was summoned and interviewed by regulators.

  • Record $34.5 billion dual listing in Shanghai and Hong Kong has been postponed   
  • Company founder, Jack Ma, chairman, Eric Jing and CEO, Simon Hu, summoned and interviewed by regulators over major issues and changes in the financial technology regulatory environment
  • Official announcement cited major event that may cause the company to fail to meet the issuance and listing conditions or information disclosure requirements

The Shanghai Stock Exchange has announced the postponement of ANT Group's hitherto record breaking $34.5 billion listing on the Science and Technology Innovation Board of the Shanghai Stock Exchange, or STAR Market, on 5 November 2020.

Explaining its decision to ANT, the exchange said, "Recently, it happened that your company’s actual controller (Jack Ma), chairman (Eric Jing) and general manager (Simon Hu) were jointly summoned and interviewed by relevant departments, and your company also reported on major issues such as changes in the financial technology regulatory environment. This major event may cause your company to fail to meet the issuance and listing conditions or information disclosure requirements".

Meanwhile, ANT announced that its dual listing on the Hong Kong Stock Exchange will also be postponed.

The suspended IPO would have been bigger than Saudi Aramco's $29.4 billion debut listing on the Saudi Tadawul, the current largest, concluded in January 2020. The Saudi Arabian national oil company was valued at $1.7 trillion.

Priced at HKD 80.00 per H share, or $10.30, the IPO received strong institutional support in Hong Kong and was oversubscribed hours after the launch last Tuesday and was closed a day earlier than planned.

ANT had chosen to list in Hong Kong and Shanghai over New York, which it is known to initially favour, due to the ongoing friction between China and the US. The Trump Administration’s increasingly adversarial stance towards Chinese companies on so-called national security grounds has caused other mainland firms to turn to Hong Kong. The IPO, had it gone ahead, would have boosted Hong Kong's leading IPO market position significantly. The impact of the postponement is still uncertain and it is not known if it will resume at a later date at all.

Keywords: Fintech
Institution: Ant Group, Alipay, Alibaba
Guest: Jack Ma
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