Home / Markets / Ipo /  Ant Group's $37-bn IPO suspended in Shanghai and Hong Kong

Ant Group's $37 billion listing has been suspended in both Shanghai and Hong Kong in a dramatic move just two days before what was set to be the world's largest-ever stock market debut.

The Shanghai stock exchange first announced that it had suspended Ant's initial public offering on its STAR market, prompting Ant to also freeze the Hong Kong leg of the dual listing. Alibaba shares slump 7% after Ant Group IPO suspended.

Ant said that its listing had been suspended by Shanghai following a recent interview regulators held with its founder Jack Ma and top executives. It said it may not meet listing qualifications or disclosure requirements, and also cited recent changes in the fintech regulatory environment.

Shanghai described Ant's meeting with Chinese financial regulators as a "major event".

Alibaba said it will support Ant Group to adapt to and embrace the evolving regulatory framework.

Ant was set to go public in Hong Kong and Shanghai on Thursday after raising about $37 billion, including the greenshoe option of the domestic leg, in a record public sale of shares.

"This is a curve ball that has been thrown at us .. I don't know what to say," said a banker working on the IPO.

Regulators had summoned Ma, Ant's Executive Chairman Eric Jing and Chief Executive Simon Hu to a meeting on Monday when they were told the company's lucrative online lending business faced tighter government scrutiny, sources told Reuters.

The meeting came as Chinese authorities published new draft rules for online micro-lending.

At the end of October, Ma had called financial regulation outdated and badly suited to companies trying to use technology to drive financial innovation.

But Beijing has become more uncomfortable with banks heavily using micro-lenders or third-party technology platforms like Ant for underwriting consumer loans, amid fears of rising defaults and deteriorating asset quality in a pandemic-hit economy.

"Either this is something that requires short-term clarification through an announcement and/or supplemental prospectus, and investors could be asked to reconfirm their orders, generally not many do so, when something like this happens. Or the deal will simply be pulled and delayed for a period time, pending resolution of the issues.

"This a significant blow or development for both for the company and other potential fintech issuers in Hong Kong and mainland China," said Philippe Espinasse, capital markets consultant and former investment banker.

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