It was supposed to have been one of the world’s largest stock market debuts, but the Ant Group’s A-share IPO was abruptly cancelled on the Shanghai stock exchange this week. It was a bitter blow to the Chinese tech giant that is backed by Jack Ma – the founder of the ecommerce titan Alibaba.
The reason for this decision was that Ant Group had been reported to the Chinese securities regulator as the company was felt to have not fulfilled the listing requirement regarding information disclosure. However many have speculated that it was Ma’s ongoing criticism of the Chinese authorities that may have been the real reason why the Ant Group’s IPO was halted.
The Shanghai Stock Exchange made the decision to bring in Ma for a series of supervisory interviews. This led to Ant Group deciding to bring a halt to its planned listing. The market debut was expected to see the tech firm selling approximately 11% of its shares on the Shanghai and Hong Kong stock exchanges.
Ant Group operates the hugely popular Alipay online payment method. This has become the main way by which people in China now pay for goods and services online. Billionaire Ma’s Alibaba had over $75 billion taken off its value as it owns around one-third of Ant Group, and saw its share price plunging nearly 10% in Hong Kong after the shock announcement.
The battle between Jack Ma and the Chinese government
It’s the latest in a series of battles that the tech entrepreneur Jack Ma has been running with the Chinese authorities. The fact that the IPO of Ant Group was pulled just two days before it was due to begin trading is thought to be another reminder of the power of the Chinese leadership and its ability to affect the trading potential of domestically-based businesses.
Ma didn’t hold back in his criticism of the local regulators and banking sector that was involved in the decision. With Chinese tech companies like Ant and Tencent becoming increasingly powerful, there has grown to be an uneasy balance between these brands and the Chinese government.
The Chinese authorities have proven to be protective of tech brands like Huawei when they have been criticised by foreign governments. But when the owners of tech firms like Ant Group start acting in ways that the Chinese government doesn’t like, the authorities will show no hesitation in carrying out measures as was shown in the sudden halting of Ant Group’s stock market debut.