Chinese President Xi Jinping personally ordered regulator interference in Ant’s IPO, according to reports. His reaction was to Jack Ma’s speech criticizing regulators, in which he quoted Xi in order to polish his own image by associating himself with the Communist Party.
- The speech reportedly infuriated several officials. Xi ordered a full investigation into Ant, but it is unclear whether he or another official gave the order to actually block the offering.
- Until recently, Ma reportedly had support from several high-placed functionaries, which is why his company enjoyed a relatively light regulatory hand for so long.
- China’s Communist Party has recently become more assertive and Xi has increasingly viewed wealthy Chinese citizens, of which Ma is the wealthiest (see graph), with suspicion.
- The Ant IPO, which would have raised at least $34b, could be delayed for at least another six months.
- The new guidelines under discussion would raise the percentage of loans that lenders need to cover from 2% to 30%. Ant's business model is heavily reliant on consumer lending.
- Five mutual funds have offered a way for retail investors to get their money back following Ant’s nixed IPO.