Ali Hasan
Ant Group‘s initial public offering (IPO) could resume if the company resolves its issues, China’s central bank governor hinted on Tuesday offering some relief to global investors seeking signs on what the future holds for the world’s largest fintech giant.
The Ant Group IPO, which at $35 billion would have been the biggest in history, was pulled by regulators just days before it was due to begin trading in Shanghai and Hong Kong in November. At the time, the Shanghai Stock Exchange said Ant Group reported “significant issues such as the changes in financial technology regulatory environment” that meant it might fall foul of listing rules.
The suspension of the IPO also came shortly after Jack Ma, the founder of Alibaba, which owns roughly a third of Ant Group, made some comments that appeared critical of China’s financial regulator.
People’s Bank of China Governor Yi Gang said relevant agencies are still investigating issues related to monopolies at billionaire Jack Ma’s Ant Group, adding that the matters were “complicated” and some risks concerned consumer privacy. To resolve the problems, regulators need a clear legal framework, Yi said on a panel at the World Economic Forum on Tuesday.
“I would say that this is a process and also once the problem solved, it will go back to the track to continue consideration according to law,” Yi said in English. When asked whether that means an IPO, he added that if the company follows the legal structure, “you will have the result.”
The message from Yi is the latest sign that Ant has avoided a worst-case scenario where it needs to shutter businesses completely. Ma resurfaced in January, ending a months-long period away from public view that fueled intense speculation about his plight.
Ma addressed teachers via a livestream during an annual event in January to commend rural educators, talking about how he’ll spend more time on philanthropy. The co-founder of Alibaba Group Holding Ltd. and Ant didn’t mention his recent run-ins with Beijing during his address.
Shares of Alibaba rose as much as 3.9% on Wednesday morning in Hong Kong. Uncertainty remains for several of Ant’s businesses, including consumer loans, crowd funded health-care and payments. The central bank said last week that any non-bank payment company with half of the market in online transactions or two entities with a combined two-thirds share could be subject to antitrust probes, according to draft rules.
If a monopoly is confirmed, the central bank can suggest the cabinet impose restrictive measures including breaking up the entity by its business type. Firms already with payment licenses would have a one-year grace period to comply with the new rules.
