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Jack Ma’s USD 35 Billion IPO caught in the caprice of a Communist Party

 

Jack Ma is a Chinese business magnate and founder of Ant Group which is a financial services company. Recently, bureaucrats from the China Securities and Regulatory Authority kept the richest man of China waiting as they prepared to throw an impulsive yet serious decision on Jack Ma’s future business plans. The meeting was meant to send tremors across the financial sector and well, it certainly did.

On 2nd November, Jack Ma got summoned to a conference with China Securities and Regulatory Commission. This was just a few days before the Chinese multi-billionaire was all set to offer Ant Group’s Initial Public Offering as the biggest stock market debut worth USD 35 billion.

Jack Ma

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According to reports, when the bureaucrats from the Regulatory Authority showed up, they skipped the formalities and directly delivered a message which was understood to mean that Jack Ma’s Ant group had its days of relaxed oversight and minimal capital requirements. Now, the government shall keep an eye on the company and be stringent with the regulations. Throughout the meeting, there was no mention of Ant Group’s upcoming Initial Public Offering and the discussion ended without its mentions, leaving Jack Ma in a total dilemma.

This conference meeting was construed as a sign for Jack Ma that his much-awaited USD 35 billion IPO may not go as smooth as he initially planned.

This created turmoil in the world’s biggest financial technology company- Ant Group and the unravelling of its most anticipated Initial Public Offering worth $35 billion. This is a reminder for the world that even the richest man of China is vulnerable to the impulsive caprice of a communist party.

The communist party of China, the world’s second-largest economy under the presidency of Xi Jinping has suddenly taken a decision to tighten its grip on Jack Ma’s businesses which includes Alibaba Group and Ant Group.

All of this chaos has left the world thinking why now? Why would China intervene with Ant’s Initial Public Offering at the last minute and what future does the world’s most valuable company have?

Ant Financials' Building

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On talks with China’s regulators and Ant Group’s representatives, it has been highlighted that only China’s top administrators under President Xi Jinping can take further action on the issue.

However, the real chaos was happening behind the scenes as Jack Ma was busy with the Regulatory meeting. The regulators had posted on social media about a “Supervisory Meeting” with founder Jack Ma which left the Hong Kong exchange high and dry.

Later on, the next day, speculations had started to rise in Shanghai about a subsequent delay. The next thing that happened was calling for the suspension of Ant Group’s $35 Billion IPO by the city’s stock exchange.

Furthermore, there were “significant changes” in the regulatory environment as quoted in the official statement. The next thing we know is officials pointing out that Ant group needed more capital and new regulatory licenses to comply with China’s new regulations for financial conglomerates that will take immediate effect from November.

China President- Xi Jinping

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When asked about the re-initiation of Ant Group’s Initial Public Offering, officials mentioned that there was no significant discussion on the topic.

However, analysts are coming up with several different theories on China’s decision to curb Ant Group’s IPO which has been put to ice. Still, a piece of bad news for shareholders who evaluated the company’s worth going USD 315 billion higher than JP Morgan. Good news for those party leaders who thought Jack Ma and his businesses were growing bigger by the second.

 

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