Jack Ma’s world’s largest IPO was scuttled personally by Chinese President Xi Jinping: Report

A WSJ report says that the Chinese President took the decision to stop Ant groups IPO after Jack Ma criticised the country’s financial watchdogs and Communist Party’s handling of the economy.

The Wall Street Journal on Thursday reported that China’s President Xi Jinping personally made the decision to halt the initial public offering of Ant Group after controlling shareholder Jack Ma infuriated government leaders by attacking the country’s financial watchdogs and Communist Party’s handling of the economy. The Ant IPO which sought to raise $37bn would have been the world’s biggest IPO.

The WSJ report quoted Chinese officials who had the knowledge of the matter. The scuttling of the IPO by the intervention of the president himself is seen as the culmination of years of tense relations between China’s most celebrated entrepreneur and a Communist government which was always uneasy with his popularity and influence. The Chinese Communist Party was also not happy with the rapid growth of the digital-payments behemoth Jack Ma controlled, say reports.

In October, Jack Ma told a summit in Shanghai that the regulatory system was stifling innovation and must be reformed to fuel growth. It was this speech that reportedly set off a chain of events that ended in scuttling the Ant IPO. Reuters reports that soon after Jack Ma’s scathing speech, Chinese state regulators compiled reports against him which were then used to stop the IPO. One the report includes how Ant had used digital financial products like Huabei, a virtual credit card service, to encourage poor and young people to build up debt.

The general office of the State Council then submitted his speech and the compiled reports to senior leaders including President Xi. It was then that President Xi ordered Chinese regulators to investigate and effectively shut down Ant’s IPO, says the WSJ report.

Ant’s IPO was to be worlds biggest!

Alibaba-owned fintech company Ant Group’s initial public offering (IPO) got massive $3 trillion worth of bids from individual investors across its dual listing in Hong Kong and Shanghai, before it was scuttled by the Chinese government. Some of the facts about the IPO was put out by the Financial Express:

– At about $315 billion market valuation, Ant Group is worth more than the gross domestic product (GDP) of Egypt ($303 billion), and Finland ($269 billion).

– Jack Ma’s Ant Group IPO will be the biggest ever in history, taking over the record set by oil giant Saudi Aramco’s $29.4 billion IPO in 2019. Prior to that, Alibaba was the biggest ever IPO when it raised $25 billion in 2014.

– According to Bloomberg, Ant Group’s market valuation is bigger than JPMorgan Chase & Company, and Bank of America. Ant is larger than Paypal Holdings Inc.($ 238 billion), and Walt Disney Company ($232 billion). While it is three times larger than IBM Corp and four times bigger than Goldman Sachs Group.

– Jack Ma would have become the world’s 11th richest person after Ant public IPO. He holds 8.8 per cent stake in the company which is worth $27.4 billion, making him the Ant Group’s biggest individual shareholder. The IPO would have increased Ma’s fortune to $71.6 billion on the Bloomberg Billionaires index.