China’s president Xi Jinping personally put Ant Group’s $37bn (£28bn) blockbuster initial public offering (IPO) on ice, the Wall Street Journal reported.
It comes after Ant’s billionaire co-founder Jack Ma criticised the country’s handling of the Chinese economy, citing Chinese officials familiar with the matter.
Following Ma’s comments, president Xi ordered Chinese regulators to investigate and effectively shut down Ant's listing, the report said.
In August, the Chinese fintech giant unveiled plans for a dual-listing stock market debut in Hong Kong (0388.HK) and on the Shanghai Stock Exchange's Star Market.
On 24 October, days before the financial services company was due to go public, Ma gave a scathing speech on how China’s regulatory system was stifling innovation and must be reformed to fuel growth.
After the speech, the general office of the State Council compiled a report on public sentiment about Ma’s speech and submitted it to senior leaders including the Chinese president. A move which set off a chain of events which torpedoed Ant’s stock market floatation, and eventually led to the suspension on 3 November.
Soon after, state regulators gathered reports on how the billionaire entrepreneur used digital financial products like Huabei — a virtual credit card service — to encourage young and poor people to build up debt.
Global investors around the world had already committed to paying more than $34bn for Ant’s shares, before the rebuke. It’s unclear whether it was Jinping or another government official who first suggested the shutdown, WSJ reports.
At the Bund Summit in the eastern financial hub of Shanghai, Ma said that the global system, which was established after World War II was outdated and too risk-averse, calling the Basel Committee on Banking Supervision “an old men’s club.”
Ma also warned that risks associated with the system are accumulating in the whole economy.
Calling for a new and “inclusive” banking system he said: “Today’s financial system is the legacy of the Industrial Age.
“We must set up a new one for the next generation and young people. We must reform the current system.”
He also accused Chinese banks’ strong “pawnshop” mentality, which demand collateral and guarantees before lending of “failing to fuel future growth.”
Watch: China's Xi decided to halt Ant's IPO - WSJ
At the time the Chinese government gave the IPO the go-ahead, Ma said: “It’s the first time that the pricing of such a big listing – the largest in human history – has been determined outside New York City.”
“We didn’t dare to think about it five years ago, or even three years ago. But a miracle just occurred,” he told the audience, which included officials from China’s regulators.
If the Ant’s listing had gone ahead, it would have further cemented Alibaba’s standing, which has already solidified its position as China’s most valuable company — the Ant IPO would have valued the firm at over $300bn.
Launched in 2004, Ant was founded by China’s richest man Jack Ma, who also co-founded e-commerce giant Alibaba (BABA), which owns a 33% share in Ant Group. The firm was spun off in 2014 to run Chinese digital payment service Alipay.
Headquartered in the Chinese city of Hangzhou, Ant’s services are used by more than 700 million people a month, with 80 million merchants using the services to buy insurance, pay bills and invest in mutual funds.
Alipay, which has around one billion users, overtook American rival PayPal (PYPL) as the world’s largest mobile payments provider six years ago. Last year it acquired UK payment firm World First.
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