After the failed IPO: Chinese regulator falls back on Ant – focus on core business | message

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The financial company is to “clean up” its business with lending, insurance and asset management, as it was called in a statement from the central bank (People’s Bank of China) on Sunday. Instead, Ant should go back to its roots as a provider of payment services.The central bank did not order the break-up of the group, in which the retail giant Alibaba has a one-third stake. Instead, she said it was “necessary for Ant Group to understand” that the deal needs to be “revised” – as soon as possible. The group now has to set up a separate financial holding company with sufficient capital at the behest of the central bank. The regulator also accused the Ant Group of having too great a market power, which damages competition and harms the interests of hundreds of millions of consumers.

The Ant Group actually wanted to go public. However, the initial public offering (IPO) was canceled at short notice at the beginning of November. The reason for this was new plans to restrict online lending, which could seriously affect the Ant Group’s business. According to this, such companies will in future have to finance 30 percent of the loans granted jointly with banks. Experts also saw this as a possible step against a company that, in the eyes of the government, may have become too rude to the state.

At the end of November, the Bloomberg news agency, citing people familiar with the matter, reported that the chances of an IPO in the coming year would become increasingly smaller. The reason given was the new guidelines for lending to consumers. Postponing the IPO in Shanghai and Beijing would be an additional setback for Alibaba founder Jack Ma and early-stage investors like Warburg Pincus, Bloomberg reported at the time. The IPO was originally supposed to bring in 34.5 billion US dollars (28.8 billion euros) in the coffers and overshadow Aramcoin’s largest IPO of 29 billion dollars.

BEIJING (dpa-AFX)

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