China clips Jack Ma’s wings with Ant Group IPO delay

China clips Jack Ma’s wings with Ant Group IPO delay

Problems had been brewing for some time

In a surprise move, Ant Group announced that it was suspending its dual initial public offering on the Shanghai and Hong Kong stock exchanges late on Tuesday night. The move was a dramatic step down from what was to be the world’s largest IPO, where the company was poised to raise $34.4 billion.

The massively over-subscribed IPO was likely to value Ant Group at $313 billion. This would have made it the fourth largest financial company in the world, after Berkshire Hathaway, Visa and Mastercard.

Details around the move are sketchy, but it seems likely that the Chinese government became frustrated at what it regards as Jack Ma’s cavalier attitude toward financial regulations. It summoned Ma and other Ant Group executives to a meeting to discuss the IPO on Monday. This meeting clearly did not go well.

Frustration between Ma and Chinese regulators has been mounting for several years, the flames of which have been fanned by Ma himself in frequent complaints about the bureaucratic nature of financial regulation in China. Regulators have responded with their own criticisms of Ma’s support of risky initiatives that could harm customers and investors.

Ma’s business success and positive reputation as an iconoclast and humble leader had, until this point, largely protected him from overt scrutiny, but it seems like the regulators have finally had enough. Problems had been brewing for some time.