INSUBCONTINENT EXCLUSIVE:
Jack Ma's Alibaba Group Holding Ltd., which owns a third of Ant, plunged 7.1% in Hong KongIt was heralded as China's answer to JPMorgan -- a
homegrown financial giant on the cusp of the biggest stock-market debut the world has ever seen.Instead, with billions on the line and an
initial public offering all but sealed, Chinese authorities have abruptly thrown into doubt the future of Ant Group Co
and its celebrated founder, the billionaire Jack Ma.Only days before the financial-technology juggernaut was to go public in Shanghai and
Hong Kong -- a coup for China's financial markets that once would have been unimaginable -- the $35-billion IPO was halted on Tuesday after
Mr Ma was summoned by regulators
In an extraordinary turn of events, authorities announced that they had belatedly discovered an array of shortcomings that, by some
chief global equity strategist at Jefferies
financial market was swift
Mr Ma's Alibaba Group Holding Ltd., which owns a third of Ant, plunged 7.1 per cent in Hong Kong, after falling by the most in almost six
The sell-off reduced Mr Ma's fortune by almost $3 billion
Hong Kong Exchanges - Clearing Ltd., owner of the city's bourse, dropped 2.2 per cent.Jack MaThe move upends what had been one of China's
biggest business success stories, as well as what was to be a pivotal step in the development of the nation's fast-growing capital
a decade, Ant, an affiliate of Mr Ma's Alibaba Group, has exploded into the world's largest financial technology company, reshaping the
lives of many ordinary Chinese
But its ascendance -- and Mr Ma's growing global reputation -- has also posed a threat to China's state-run lenders and their political
benefactors.Tuesday's developments left bankers and global investors groping for answers
The immediate fate of the many billions already tied up in the IPO is for now uncertain.Changes NeededChinese authorities didn't give much
detail about the issues behind the suspension, beyond saying that the much-anticipated debut couldn't go ahead because there had been
micro-lending units, according to people familiar with the matter
It will also have to reapply for licenses for the units to operate nationwide, the people added, asking not to be identified discussing a
private matter.The IPO is expected to be delayed by about six months, and funds will be returned to investors in the meantime, news portal
QQ.com reported, citing an unidentified person.Major gray market brokers for the deal, including BTIG LLC, told clients all transactions
will be canceled, according to people familiar with the matter
Millions of shares were traded in the over-the-counter market prior to Ant's planned debut, many at about a 50 per cent premium to the
listing price of HK$80 ($10.32)
BTIG didn't immediately respond to a request for comment.Ant, which spun out of Alibaba in 2010, has long been seen as a champion of China's
economy and an example of how the Communist Party has allowed entrepreneurs -- especially in the technology sector -- to flourish within its
top-down political system
Tuesday's setback may cast a pall over the country's financial markets, even as President Xi Jinping tries to create stock exchanges that
signs on Monday when Mr Ma was summoned to a rare joint meeting with the People's Bank of China and three other top financial regulators and
IPOThe IPO was on pace to break records
It had attracted at least $3 trillion of orders from individual investors for its dual listing in Hong Kong and Shanghai, and in the
preliminary price consultation of its Shanghai IPO, institutional investors subscribed for over 76 billion shares, more than 284 times the
initial offering tranche.The fintech company's IPO would have given it a market value of about $315 billion based on filings, bigger than
and four times larger than Goldman Sachs Group Inc.Dealmakers at firms including Citigroup Inc
and Morgan Stanley were set to feast on an estimated fee pool of nearly $400 million for handling the Hong Kong portion of the sale, but
were instead left reeling after the listing was pulled
Top executives close to the transaction said they were shocked and trying to figure out what lies ahead.But Ant has faced scrutiny in
Chinese state media in recent days after Mr Ma criticized local and global regulators for stifling innovation and not paying sufficient heed
to development and opportunities for the young
At a Shanghai conference late last month, he compared the Basel Accords, which set out capital requirements for banks, to a club for the
elderly.And over the weekend, at a meeting of the Financial Stability and Development Committee led by Vice Premier Liu He, officials
stressed the need for fintech firms to be regulated.Ant dominates China's payments market via the Alipay app
It also runs the giant Yu'ebao money-market fund and the country's largest online consumer-lending platform
Other businesses include a credit-scoring unit and an insurance marketplace.
