Ant Group's 'World's Biggest IPO' Of $37 Billion Suspended By Chinese Regulators

What was supposed to be the world¡¯s largest IPO in the coming days has turned out to be one of the biggest shocks in the international stock markets. A $37 billion stock market listing of Jack Ma led Ant Group has now been suspended by the financial regulators in China.

Alibaba Group Holding Ltd Executive Chairman Jack Ma (Image: Reuters)

In a big blow to the firm, Ant Group¡¯s initial public offering (IPO) has been suspended on the STAR Market of Shanghai stock exchange. Following the suspension, Ant also froze its Hong Kong listing, which was due on Thursday.

The suspension followed a meeting between Ma and China's financial regulators on Monday. As described in a report by Reuters, the company now faces a tighter scrutiny by the authorities. The meeting as well as the tougher regulations have disqualified Ant from the listing for now.

Some blame it on the recent public address by Jack Ma, calling out China's financial regulation for its outdated practices and unsuitability to new-age technologies employed by financial firms. It is believed that this public criticism put Ma in the crosshairs of regulators.

The report highlights that the suspension is a reality check for the Ant Group and Jack Ma, as the company was being fronted as a technology firm rather than a financial institution. "The Communist Party has shown the tycoons who's boss. Jack Ma might be the richest man in the world but that doesn't mean a thing. This has gone from the deal of the century to the shock of the century," Francis Lun, CEO of GEO Securities, was quoted as saying.

Shockwaves through the market

Ant¡¯s suspension from the listing comes as a major shock to the global stock market as major investors from across the world had lined up to get their hands on what was supposed to be the world¡¯s largest IPO. As can be judged, the suspension had a ripple effect on the global markets.

Reuters reports that Alibaba Group Holding, the controlling firm of Ant, fell 9% in U.S. trading following the suspension. The drop resulted in a loss of $76 billion off its value.

(Representative Image: Reuters)

Following the suspension, Ant apologized to investors for any inconvenience caused by the IPO delay. "We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges," it said.

The company promised to provide further details on the suspension of its Hong Kong listing. Simultaneously, it will also provide updates on applications for refunds as soon as possible.

Alibaba said it would support Ant through the hurdle and will help it to adapt and embrace the evolving regulatory framework.