“In accordance with fintech’s financial nature, we will bring all financial activities under a unified scope of supervision,” Liu Fushou, chief legal counsel at the China Banking and Insurance Regulatory Commission, said on Friday (Nov. 6).
Ant Group has initially estimated raising $37 billion in its initial public offering (IPO). The plan would have had the stock listed by the Shanghai and Hong Kong stock exchanges in China. However, Shanghai Stock Exchange put a stop to the listing on Nov. 3, one day after Beijing debuted a set of regulations that would have forced Ant Group to revamp its business model.
Billionaire Jack Ma, China’s richest man, owns about a one-third stake and the controlling interest in Ant Group, a spinoff of his first company, Alibaba Group.
“We will be proactive in supporting Ant Group to adapt to and embrace the evolving regulatory framework. We have full confidence in Ant Group’s colleagues’ ability to do a good job,” an Alibaba spokesperson said. “We will continue to work hard to not only meet but exceed expectations and fulfill our responsibility to society.”
But as PYMNTS has reported, the micro-lending operations, which has been a high-growth business for the company, may be under scrutiny. But the actual structure of the business — how companies strike partnerships with traditional financial institutions (FIs) — may be under examination.
The canceled IPO is a big setback for Ant Group, which now faces an overall regulatory shakeup.
Chinese regulators’ draft rules for online micro-lending call for companies to make 30 percent of the loans struck with FIs. However, the Times reported that Ant Group currently funds only 2 percent of its loans. Most of the rest comes from its FI partners.