Jack Ma’s Ant Group halts Thursday dual debut in Hong Kong and Shanghai

Published (HKT): 2020.11.03 23:28

The dual Hong Kong and Shanghai listings of Alibaba’s Ant Group were abruptly suspended on Tuesday evening, ahead of the start of trading on Thursday, the company announced as the record-setting stock came under scrutiny by Chinese regulators.

Ant’s A-share initial public offering on Shanghai’s sci-tech innovation Star board and its H-share IPO on the Hong Kong Stock Exchange, totaling 1.67 billion shares in each market, were well on their way to becoming the world’s largest listing with a fundraising target of about US$34.5 billion when China’s central authorities hauled up top executives of the company for meetings.

Ultimate controller Jack Ma, executive chairman Eric Jing and chief executive Simon Hu of the group were individually summoned and interviewed by Chinese regulators on Monday.

The following evening, the Shanghai Stock Exchange suspended the A-share IPO and issued a statement addressing the Ant Group: "Recently, the relevant regulatory authorities have jointly conducted meetings with the ultimate controller, chairman and general manager of your company, whereas your company has also reported material issues, including changes in the fintech regulatory environment.

“Such major events might cause your company to fail in meeting listing qualifications or information disclosure requirements.” The Shanghai Stock Exchange also said that it would continue to maintain communication with Ant’s management and sponsors.

Ant announced voluntarily halting its Hong Kong listing shortly after the Shanghai suspension. In a filing to HKEx, the group said that it would release details regarding the suspension of the H-share listing and refund the application monies as soon as possible.

Earlier, the group responded to mainland Chinese media after the meetings with the regulators, saying that it would “implement opinions discussed in the interviews in an in-depth manner.”

Last week, Ant’s Hong Kong and Shanghai retail offerings whipped up a frenzy among institutional and retail investors. In Hong Kong about 1.55 million retail investors, roughly a fifth of the city’s population, subscribed to the stock, pouring in more than HK$1.3 trillion (US$168 billion), whereas the retail portion of the Shanghai listing was reportedly more than 870 times oversubscribed.

If it clears the latest regulatory hurdles, Ant could also make global financial history by becoming the world’s largest initial public offering, besting the record US$29.4 billion achieved by Saudi Aramco less than a year ago.

The Hong Kong Monetary Authority, the city’s de facto central bank, said that it had the confidence and ability to maintain the stability of Hong Kong’s currency and financial system. HKEx declined to comment on individual listing applications or issuers.

It is now unknown whether the Hong Kong stock will debut on Thursday as planned. It is also unclear how the suspensions will affect the performance of both the Hong Kong and Shanghai markets when trading resumes on Wednesday. But shares of Alibaba, which owns a roughly 33% stake in the Ant Group, has plummeted more than 8% in pre-market trading after the announcement about the suspensions.

The Ant Group has not yet responded to Apple Daily’s inquiries.

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