The filings also mentioned “recent changes in the fintech regulatory environment”, hinting that newly published rules may have got in the way. The sudden suspension also suggests that some powerful officials may be displeased with Mr Ma, a self-made man who, by the conservative standards of big business in China, has an outspoken streak. Economist.
It is simply unbelievable: China is evolving new regulations which can cripple Alibaba’s Ant Group and other challenger banking institutions mushroomed as fintechs. Yes, the insinuation is that the banks are not happy with the “Amazon of money” of China, and most banks do not see a path into the future with Ant’s Alipay humongous impacts in China.
You may not blame those banks, though; Ant processed $18 trillion worth of transactions in 2019 when Visa and Mastercard combined for $16 trillion. And because of that asymmetric execution and capabilities, a new fintech regulation is coming to cripple a company which was billed to raise $34 billion, out of fear of Alipay shaping a new ordinance.
Following Chinese government’s intervention, the Shanghai stock exchange has announced the postponement of Ant’s record-breaking initial public offering.
The development came after Chinese regulators weighed in on the Ant’s Group’s move to go public, using a slew of new fintech regulations.
The stunning development started when Ant’s boss, Jack Ma was pulled in by the authorities in what appears to be an orientation chat on the new regulatory rules. On Monday, Chinese authorities said in a statement that the central bank and three financial regulators had held a rare joint meeting with Ma and two Ant’s executives.
The meeting came just a few days to Ant’s $34 billion IPO in Honk Kong and Shanghai.
Ma has been critical of many regulatory measures in China, especially the Basel Accord, a series of international regulations that require banks to hold a certain amount of capital, as outmoded for the modern era. Part of his complaints is about the inadequacies of the Chinese lending institutions.
Recently, the Chinese government has shown more interest in the financial sector, as more companies embrace fintech. China’s central bank has announced a plan to develop a national digital currency to serve as online alternative yuan. Part of the plan is to make rules that will regulate all digital transactions in the country.
Honestly, I never expected that from China. But it seems banks run this world. That China can freeze the biggest party in the world – highest IPO in history because of the concerns of banks tells me that Abuja is not as “messed up” as most of us think in Nigeria!
The Largest IPOs in History
- Ant Group $34.4bn* – China
- S Aramco $29.4bn – Saudi Arabia
- Alibaba $25bn – China
- Agricultural Bank of China $22.1bn – China
- ICBC $21.9bn – China
- Softbank $21.3bn – Japan
How would you feel if the Central Bank of Nigeria (CBN) begins to retool our laws to make life harder for fintechs just for the banks to thrive?