- Tram Ho
Recently, billionaire Jack Ma has been busy with the launch of Ant Group’s largest IPO in the world (if successful) as well as preparing for the largest shopping event on the planet on 11/11. Alibaba’s coming.
But on November 3, Ant Group unexpectedly postponed the IPO due to the intervention of the Chinese government. According to Bloomberg, the IPO was delayed after Jack Ma was summoned by the authorities.
Many sources believe that the sudden delay may be related to the billionaire’s speech about the Chinese financial system last month. Specifically, at a high-profile financial conference in Shanghai, Jack Ma threw himself into the “heart of the storm” when he criticized local regulators for holding back innovation.
In the speech, the boss Alibaba likened the Basel Global Banking Agreement to “the club of the elderly”. In addition, he said that China’s biggest risk is not “systemic risk” but “lack of a complete financial ecosystem”. Jack Ma likened Chinese banks to “pawnshops”.
“If you borrow 100,000 yuan from the bank, you are worried. If you borrow 1 million yuan, both you and the bank are worried but if you borrow 1 billion yuan then you have nothing to fear. “Banks are right to worry,” he said.
Ant Group is falling under the “sights” of the Chinese authorities.
The thought of those words of Jack Ma will pass, but this week, new “consequences” occur. On November 2, Jack Ma was summoned to a secret meeting with the Central Bank of China and other top financial regulators. Accordingly, Beijing has issued many draft rules on online lending as well as stricter capital requirements and operating rules for some of Ant Group’s consumer credit businesses. A day later, Ant Group announced to postpone IPOs in both Shanghai and Hong Kong.
The news caused a deep price drop with Alibaba shares on the New York Stock Exchange. As for Jack Ma, his fortune has “evaporated” 3 billion USD. With the number of shares this billionaire holds in Ant, when the company goes public, earning an expected amount of $ 34.5 billion, his fortune will increase by $ 27.4 billion.
What Jack Ma said at the Shanghai conference was quite sensitive. In reality, however, many small businesses in China have had difficulty getting money from banks over the past decade.
Many people believe that Ant Group falls into “sight” because of the rapid development in recent years. Ant’s IPO has attracted at least $ 3 trillion in upfront funds to buy shares. Meanwhile, banks are still in a struggling situation, even having to restructure because of lack of capital. A source said some Chinese commercial banks have complained to them about this issue.
Ant Group, with its very large user base, takes small loans seriously. But in the future, Beijing may introduce somewhat detrimental regulation for Ant to appease banks.
Jack Ma’s statement may be one of the reasons for the difficulty Ant Group is facing. However, experts say China needs to consider Jack Ma’s opinion because he knows where the problem really lies and can come up with part of the solution.
Source : Genk