Alibaba Group Holding Ltd BABA-backed Ant Group is unlikely to be able to hold its suspended initial public offering before 2022, Bloomberg reported Sunday.
What Happened: Chinese regulators are demanding that Ant comply with both new and proposed rules applicable to various fields including consumer lending, regulatory officials familiar with the matter told Bloomberg.
The officials reportedly said that it is unlikely that with so much work to be done by Ant in meeting the new regulatory framework and some applicable rules not clear yet that the IPO would take place before 2022.
The immediate priority for Beijing is that the Jack Ma-founded Ant complies with the changing regulatory environment, Bloomberg noted, citing the officials.
Why It Matters: A joint task force led by the Financial Stability and Development Committee — a financial system regulator — alongside departments of China’s central bank and other regulators is overseeing Ant and is in touch with the company to collect data and materials, according to two sources of Bloomberg.
The task force is studying the restructuring of the company and also drafting new rules for the industry itself.
Under the new draft rules ushered in November, Ant would be required to replenish capital to the extent of $12 billion, noted Bloomberg.
This month, Ant Group CEO Daniel Zhang praised Beijing’s new draft as “timely and necessary.”
The CEO’s stance is markedly different from Ma’s who had criticized China’s bankers and regulators ahead of the now-suspended IPO, which led to a reprimand.
Price Action: Alibaba shares fell nearly 0.4% to $276.48 on Friday and gained 0.12% in the after-hours session.
Photo courtesy: World Economic Forum via Flickr
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