Chinese regulatory probe is said to delay approval for Ant’s IPO

China’s securities regulator is probing a potential conflict of interest in fintech giant Ant Group’s planned $35 billion stock listing, delaying approval for what could be the world’s largest IPO, three people with direct knowledge of the matter said.

The China Securities Regulatory Commission (CSRC) is looking into the role of Alipay, Ant’s flagship payment platform, as the only third-party channel through which retail investors could buy into five Chinese mutual funds investing in the IPO, the people told Reuters, speaking on condition of anonymity.

The arrangement sidelined banks and brokerages, the traditional route for retail investors to buy into funds. More than 10 million retail investors piled money into the five mutual funds when they were launched in late September, underscoring the marketing clout of Alipay.

The CSRC said in guidelines effective from Oct. 1 that mutual fund distributors should avoid conflicts of interest form selling products related to their other existing and potential businesses.

The people said the probe was unlikely to derail the IPO, although it was unclear what its outcome might be.

It has already delayed Ant’s plans, however, as the company had hoped to get CSRC approval last month, and it has narrowed the window for the IPO ahead of the Nov. 3 U.S. presidential election, which could fuel uncertainty for global markets.

Ant declined to comment. The CSRC didn’t immediately respond to a request for comment.

Ant, a domestically incorporated affiliate of Chinese e-commerce behemoth Alibaba, is seeking a dual-listing in Shanghai and Hong Kong as soon as this month, and needs CSRC approval for both listings.

The delay in CSRC approval has forced Ant to postpone a hearing with the Hong Kong stock exchange, the last part of the approval process for the Hong Kong listing, the people said.

The Shanghai exchange, in contrast, cleared the listing in 24 days, compared with roughly four months for most IPO candidates that obtained approval in September, according to public disclosures from the exchange.

HONG KONG HEARING

At $35 billion, Ant’s IPO would be the world’s largest, surpassing oil giant Saudi Aramco’s $29.4 billion flotation last December.

Ant’s listing process has been marked by secrecy, with the firm asking lead bankers to personally sign confidentiality pacts and pressing some investors to explain why they should be allowed to attend marketing meetings.

Ant originally aimed to have the hearing with the Hong Kong bourse’s Listing Committee on Sept. 24 and to launch the IPO after the week-long Chinese National Day holiday that ended on Oct. 8, said two of the people.

The company is still aiming for the Hong Kong hearing to take place in the coming days, according to one of the people.

The Hong Kong exchange declined to comment.

Exchanges and regulators scrutinise IPO prospectuses and question companies about key issues including their financials, corporate governance, shareholders and risk factors as part of their reviews.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.