Central bank governor Gang Yi has said that China still welcomes a possible initial public offering (IPO) by Ant Group.
Yi, governor of the People's Bank of China, said an Ant Group IPO may be reconsidered under the right circumstances. Tech company Ant Group, backed by Alibaba founder and billionaire Jack Ma, was set to launch the largest-ever IPO last year.
Speaking at a virtual meeting of the World Economic Forum, Yi mentioned: “I’d say that you just follow the standard of legal instruction, you will have the result.”
Largest IPO and cancellation
Ant is an online payments business that operates Alipay, the biggest online payment system in China, where cash, checks and credit cards have long been dominated by electronic payment systems and apps.
Ant Group priced its shares at $10.32 on the Hong Kong Stock Exchange and $10.26 on Shanghai’s Star Market and was expected to raise around $34.4 billion.
The share price was set by advisers to Ant amid reports of very strong demand from major investors. Ant was only supposed to sell approximately 11% of its shares but the IPO will boost the the whole business’ value to about $313 billion.
This Ant offering will be higher than the previous record for an IPO captured by Saudi Arabia’s state oil company Aramco when it raised $29.4 billion on the Riyadh exchange last December.
The IPO was abruptly suspended by the Chinese government, citing “major issues.” According to the Shanghai Stock Exchange, Ma was called in for “supervisory interviews” and that a change to the regulatory environment meant Ant no longer met “listing conditions or information disclosure requirements”.
The suspension follows Ma’s comments at a Shanghai fintech conference, in which he criticized China’s state-dominated banking sector. He described China’s banks to “pawn shops” and expressed disappointed over their lack of innovation.
Yi described the decision to stop the listing as a “complicated issue”.
Aside from the IPO suspension, China’s State Administration for Market Regulation (SAMR) began an investigation last December into Alibaba over its alleged monopolistic practices. Previously, regulators warned the company about compelling sellers to sign exclusive deals preventing them from offering products on rival platforms.
The central bank governor argued that while financial technology companies have opened up China’s financial system and provided more opportunities to smaller borrowers, it also created some possible risks.
“That benefit is obvious, but at the same time we can see also some risks to consumer information and protection and also some monopoly potential and also some misuse of the monopoly power,” Yi added.
Jack Ma's disappearance and resurfacing
Last week, Ma made his first public appearance after months of absence.
Concerns about his whereabouts began after he failed to attend the recording of the television show Africa’s Business Heroes, where he served as a judge. According to Alibaba, this was due to scheduling conflict.
However, several news reports pointed out that he has not been seen in public since he made his comments on China’s banking system at an event in October.
His reappearance quelled speculations over his whereabouts for several months following the Chinese government’s increased scrutiny of his businesses. A local government media reported on a video meeting on Wednesday where Ma spoke with 100 rural teachers in China.
The video meeting was first reported by Tianmu News, which is backed by the provincial government of Zhejiang. According to the report, Ma talked with the teachers as part of one of his charity foundation’s initiatives.
This annual event is regularly hosted in the resort city of Sanya but Covid-19 restrictions prompted it to be held online this year.
