The Shanghai stock exchange has suspended Alibaba spin-off Ant Group’s A-share IPO on its Star board, less than 48 hours before trading was to start on Nov 5, the Chinese exchange said in the evening of Nov 3.
According to the Shanghai Stock Exchange, Ant Group was told of significant changes in the financial technology regulatory environment. As such, Ant Group might fall short of the listing requirement regarding information disclosure.
“Consequently, the concurrent proposed H Share listing on the Main Board of The Stock Exchange of Hong Kong Limited shall also be suspended,” according to Ant Group in a statement issued via the Hong Kong Exchange.
Ant Group's US$37 billion dual-IPO in Hong Kong and Shanghai is the world's largest ever. The hot issue garnered funds from investors such as GIC, Singapore’s sovereign wealth fund, which is reportedly putting in more than US$1 billion.
The suspension of the IPO follows news that Jack Ma, Alibaba’s founder, was on Monday was summoned by regulators to discuss newly-issued industry guidelines, which might affect Ant’s earnings.
Besides Ma, regulators also met Ant Group’s executive chairman Eric Jing and CEO Simon Hu.
On Oct 24, Ma called China’s big state-owned banks for having a “pawnshop mentality”.
He believes that China needs bold new players such as Ant to provide financing to innovative but collateral-poor companies and individuals typically ignored by the big banks.
“Jack Ma clearly miscalculated. After months of keeping his head down, he has made a lot of enemies,” said Chen Zhiwu, a finance professor at the University of Hong Kong, told the Financial Times.
