Prospects for Ant Group's IPO Relaunch in China... Authorities Hold 'Pre-Meeting' with Ant Management

Path to Relisting Opens... Astronomical Fundraising Seems Difficult
Regulators Also Impose Fines on Small Delivery Platforms in Shanghai

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The initial public offering (IPO) of Ant Group, the financial subsidiary of Alibaba Group, is expected to be relaunched.

Chinese media outlets such as Caixin and Global Times reported on the 13th that four departments?the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange?held a preliminary meeting (Weitan) with Ant Group's management. This meeting took place just two days after the parent company Alibaba Group was fined 18.228 billion yuan (approximately 3.1124 trillion KRW).

[Image source=Yonhap News]

Pan Gongsheng, Deputy Governor of the People's Bank of China, stated at a briefing after the meeting with Ant Group's management, "Ant Group has developed a comprehensive and feasible plan based on the recommendations of financial authorities," adding, "Ant Group will be reorganized into a financial holding company."

He further explained, "Ant Group presented five revised plans that include improving corporate governance and ceasing illegal financial activities in credit, insurance, and asset management."

Ant Group submitted a revised plan to provide consumers with choices for payment methods and to sever inappropriate relationships with affiliated companies such as Jiebei and Huabei. The plan also includes strict compliance with laws regarding the collection and use of personal information and acceptance of regulatory policies such as maintaining adequate capital requirements. To this end, Ant Group will transform into a financial holding company encompassing all affiliates involved in financial activities and will be subject to regulatory supervision.

If the improvement plan submitted by Ant Group is finally approved, the IPO, which was suspended last November, is expected to be pursued again. Yi Gang, Governor of the People's Bank of China, stated at the Davos Forum in January that if Ant Group fully complies with the law and resolves customer complaints, an IPO would be possible. However, the possibility of raising astronomical funds appears low.

Meanwhile, Global Times reported that Shanghai regulatory authorities fined Sherpa, a food delivery platform mainly targeting foreigners, 1.16 million yuan (approximately 199 million KRW) for abusing its monopoly position. Global Times evaluated this as a clear policy signal to the market that even small platform companies will be punished if they violate antitrust laws.