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WSJ NEWS EXCLUSIVE
Ant IPO-Approval Process Under Investigation
by Beijing
Focus is on how Jack Ma won speedy permission for stock listing last year
Usually flamboyant entrepreneur Jack Ma, here in 2019, has kept a lower profile since regulators cracked down last fall.
VCG/GETTY IMAGES
wsj.com
By
Lingling Wei
April 27, 2021 10:00 am ET
Beijing is investigating how Jack Ma won speedy approvals for his Ant Group Co.’s stock listing last year, according to people with knowledge of the matter, signaling that state actors are getting embroiled in the crackdown on the tech billionaire.
The central-government investigation, which started early this year, focuses on regulators who greenlighted the initial public offering, local officials who advocated it and big state firms that stood to gain from it. Mr. Ma’s relationships with these state stalwarts are being examined as part of the scrutiny, according to the people.
The probe means uncertainty continues to loom over the future of Ant and controlling shareholder Mr. Ma. The usually flamboyant entrepreneur has kept a low profile since the IPO was stopped last-minute in November. He won’t be allowed to leave China until Ant completes a business overhaul ordered by regulators and the government’s investigation is over, the people say.
In the eyes of China’s top leadership, Ant’s business model, in which lending is driven by big data, endangers the country’s financial system—in part because the company’s banking partners assume most of the risk. Leaders are also concerned that those who stood to benefit from what would have been the world’s largest IPO include a coterie of well-connected individuals and institutions, some influential political families in China and big state funds.
Mr. Ma managed to push the Ant IPO application through various levels of securities regulators in a relatively short time—even as banking regulators were voicing concerns about the business model and were preparing tougher regulations for companies like Ant. The wait to be listed in China is often many months or longer.
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