It does not really pay the Chinese government to pee. Just ask billionaire Jack Ma. He made some comments on October 24 in Shanghai about China’s financial regulatory system. He declared the rules bad to promote innovation. He also called for regulators who implement the system “an old man’s club.” Before he exited, Ant Group’s IPO was off the table. In a press release about the postponement, the Shanghai Stock Exchange said the Ant Group’s IPO has been pulled down due to “major issues” from which the company “may not meet listing conditions or disclosure requirements.”
The Chinese government has recently issued new guidelines for online banks. It is expected that the ant will have to withdraw its business to meet the new regulations.
Now, the Chinese government is looking at Ma’s Alibaba as well. In particular, it has launched an anti-monopoly investigation of the country’s largest tech company. Of course, Alibaba and Ant are co-founders and China’s richest person. Now the government is going after its growing technological empire. The government is looking into Alibaba’s practice of forcing its vendors to sign exclusivity contracts. To be clear, this is standard market practice, regardless of how Ma’s competitors or the State Administration of China (SAMR) for market regulation feel about it.
As a result of this news, shares of Alibaba declined by 8.1%. This is the biggest one-day slide by the tech giant since mid-November.
In a separate case, China’s central bank also said that it was working with three financial watchdogs and urged a meeting with the ant group to enforce strict financial rules. Ant’s now deferred IPO was considered the world’s largest IPO in November. Ant Group was expected to raise $ 37 billion in IPO valuations of $ 300 billion.
Ant’s IPO had at least $ 3 trillion for dual listings in the Hong Kong and Shanghai stock markets. This gave a ton of interest to investors in China who wanted a piece of ant. The IPO was also set up to make billionaires of many early investors and employees, including Mao’s Alibaba co-founder Lucy Peng. It would have been Ma’s second “biggest IPO ever”. When it went public in 2014, Alibaba held the title of largest IPO. Saudi Aramco dropped Alibaba from that title when it made its IPO in December 2019.
Ma developed Alipay, a payment app, which is Ant’s core business. He created it as a side project to fill a need in China’s growing e-commerce industry. Prior to Alipay, state-run banks with poor customer service and inefficient methods were the only option.
The ant replaced him. With Ant, people can quickly decide on small loans and get. They can also pay for things through ants and invest in money market funds with 15 cents.
Ma would probably think twice before criticizing the Chinese government’s move forward.