Ant group is a digital finance group which brought a system that made it easier to pay, borrow and invest through your smartphones in mere minutes. On Monday, its launch was blocked, and the company’s heads were all summoned for questioning.
In the late evening, the shanghai stock exchange ceased the activities of the Group and didn’t let them launch for the general public. This debut had investors from all over the world, putting in over $32 billion in investments for the project.
The stakeholders, including Jack Ma, co-founder and major shareholder of one of the world’s biggest eCommerce store, Alibaba and Ant’s controlling shareholder, were called in on Monday for a meeting.
None who were present during the proceeding has said anything regarding what went there and what was discusses, however, judging by the timings it is safer to say that there must be an ongoing internal discord between the heads of the company and Chinese authorities.
Mr Ma has been vocal about the injustice that the government’s officials had served him and said that he was ill-served. He might not have a say in Ant group’s management, but being one of the Group’s leading shareholder, Jack Ma was also summoned.
After their summon, the company announced to suspend its launch in Hong Kong along with all of China. They apologized to their investors, saying that they are sorry for any inconvenience.
“We will keep in close communications with the Shanghai Stock Exchange and relevant regulators,” the company’s spokesperson said, “and wait for their further notice with respect to further developments of our offering and listing process.”
Alipay has gained wide popularity in China with its over 730 million users making their payments with the app daily. For the past decade, Ant has become one of the essential must-haves for anyone shopping on the buzzing streets of major Chinese cities.
However, being the biggest finance group could not protect the Ant Group from heavily politicized financial institutions in China. They have been wary of Ant’s rapid growth in the country saying that in the event of a meltdown, it might be too big to deal with.
Ant responded with a pivoted stance to this concern. They have become a partner to the banks instead of using their own money of loans and investments. They connect the buyers and customers to the banks, which will aid them correctly, helping the individual borrowers and enterprises to communicate with the banks.
If the company hits markets, it is expected to value at over $310 billion, more than any individual bank in China and more than most global banks. Jack Ma, already the wealthiest man in China would add to his finances after Ant Group hits the markets in full swing.
However, the future of this finance giant lay in the hands of Chinese regulators. Their weariness and concerns regarding Group’s growth and progress might become a hinder for them.
“The regulators have long been looking at the risks in this area and how it should be regulated, but it’s all suddenly coming out at this specific time,” said the head of Zero One Research Institute, Yu Baicheng “It’s definitely a statement of the regulators’ attitude.” He elaborated. Zero One Research Institute is a think tank in Beijing, China and focuses on finance and technology.
Ant’s official statement after meeting was “Views regarding the health and stability of the financial sector were exchanged,” which is vague and not indicative of anything concrete.
Mr Ma has been vocal on this political hold on financial matters. He said that regulations based on lack of knowledge and regulators trying to contain the risk could stifle innovation. He noted that management on online forums could not be done with the experience from a century-old system.
The regulations controlling this online finance and banking initiative are old and need revisions, according to Jack Ma as he said: “We cannot use yesterday’s methods to manage the future.”
I’m Ava Paul, an experienced news website author with a special focus on the entertainment section. Over the past five years, I have worked in various positions of media and communication at World Stock Market. My experience has given me extensive knowledge in writing, editing, researching and reporting on stories related to the entertainment industry.
