China regulators summon Ant Group executives ahead of IPO

Chinese regulators have summoned Ant Group founder Jack Ma and two other senior executives to a formal meeting just days before the company's shares are due to begin trading in Shanghai and Hong Kong

Hong Kong China Ant Group IPO (Copyright 2020 The Associated Press. All rights reserved)

Chinese regulators summoned Ant Group founder Jack Ma and two other senior executives to a meeting just days before the company s shares are due to begin trading following a blockbuster offering expected to be the world’s largest.

In a statement issued on Monday, the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the Securities Regulatory Commission and the State Administration of Foreign Exchange said they had conducted “regulatory interviews” with Ma, Ant Group's chairman Eric Jing and its president Hu Xiaoming.

No further details about the meetings were disclosed by the authorities or Ant Group, although such a move by regulators is typically seen as a warning or dressing down of sorts.

“Views regarding the health and stability of the financial sector were exchanged,” Ant Group said in a statement. “Ant Group is committed to implementing the meeting opinions in depth and continuing our course based on the principles of: stable innovation; embrace of regulation; service to the real economy; and win-win cooperation.”

“We will continue to improve our capabilities to provide inclusive services and promote economic development to improve the lives of ordinary citizens,” the company said.

Ant Group operates Alipay, the world’s largest and most valuable financial technology (fintech) company and one of two dominant Chinese digital wallets in China, the other being rival Tencent’s WeChat Pay.

Jack Ma founded e-commerce giant Alibaba in 1999 to help match buyers and sellers in China’s fast growing market. Alipay was introduced as a payments method to boost users’ trust in the platform.

Alibaba owns a third of Ant Group and spun off Alipay in 2011. The company was later rebranded as Ant as the company branched into lending and other financial services.

Ant Group's shares are due to begin trade in Hong Kong and Shanghai on Thursday. 5, after it raised at least $34.5 billion in the world’s biggest stock sale. Retail investors in Shanghai placed bids for nearly $3 trillion worth of shares.

The company has come under increased scrutiny and tighter regulation as it has expanded the range of financial technology services it offers. Among the new regulations are caps on the use of asset-backed securities to fund consumer loans, new capital and licensing requirements and caps on lending rates.

On Monday, the central bank raised the registered capital requirement for lenders like Ant to a minimum of 5 billion yuan ($747 million).