Chinese People's Bank to Resume Ant Group IPO Once Issues Are Resolved

Lee Kang, Bank President, "Following Ant's Legal Procedures Can Lead to Good Results"
Currently Under Investigation... Ant Group Issue is Complex and Also Related to Personal Privacy

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The People's Bank of China, the central bank of China, stated that the Ant Group's initial public offering (IPO) could resume once the issues are resolved.

According to Chinese media such as Fenghua Net on the 27th, Yi Gang, governor of the People's Bank of China, said at the '2021 Davos Agenda Virtual Meeting' hosted by the World Economic Forum (WEF) the previous day, "If Ant Group follows normal legal procedures, it can achieve good results."

[Image source=Yonhap News]

Yi said, "Chinese financial institutions are investigating Ant Group's monopoly-related issues," and pointed out, "The Ant Group issue is complex and also involves consumer privacy."

He added, "The investigation into Ant Group is a process, and once the issues are resolved, Ant Group can resume its listing according to the law."

Ant Group, a financial subsidiary of China's Alibaba, had been pursuing listings on the Shanghai (Science and Technology Innovation Board) and Hong Kong stock exchanges last November, but the IPO was indefinitely postponed due to intervention by Chinese financial authorities.

At that time, Ant Group's IPO size was expected to reach $35 billion, surpassing Saudi Arabia's state-owned oil company Aramco's $29.4 billion, which recorded the largest IPO in December 2019.

When announcing the postponement of Ant Group's listing, Chinese financial authorities also announced regulatory measures on online loans. The authorities set limits such that individual loans cannot exceed 300,000 yuan, and corporate loans cannot exceed 1 million yuan.

Chinese financial authorities have also drafted the 'Non-bank Payment Institutions Regulation' to strengthen antitrust regulations. According to the draft prepared by the Chinese financial authorities, if a single corporation's market share in the online and mobile payment market exceeds 50%, it becomes subject to antitrust investigation.

Additionally, if the combined market share of two corporations exceeds two-thirds, it becomes subject to antitrust investigation. If the market share of three corporations exceeds three-fourths, it is also subject to investigation. If deemed a monopoly, the People's Bank of China, together with the State Council, can investigate the corporation and may request the authorities to split the company.

As of the end of June last year, Alipay, operated by Ant Group, held a market share of 55.4%. WeChat Pay's market share was 38.5%. The combined market share of the two corporations is an overwhelming 93.9%.