After the planned record IPO of the Ant Group was canceled at short notice, the Chinese financial giant and its parent company Alibaba are under pressure. After a decline of around eight percent on the New York stock market, the share of the largest online trading company Alibaba continued on Wednesday in Hong Kong with a minus of more than seven percent. The company owns a third of the Ant Group, whose IPO in Shanghai and Hong Kong surprisingly failed the day before.

Within just a decade, Ant Group has become the largest fintech company in the world with the mobile payment service Alipay, which is popular in China. It also offers loans, insurance, and asset management online today. Alipay shares the mobile payment market in China with the competition from Wechat-Pay from the Chinese Internet company Tencent. In China today, people usually only pay with their mobile phones in shops by scanning a code.

Ant Group apologized to the investors who were actually with them this Thursday expected the biggest IPO of all time. The Shanghai Stock Exchange justified the cancellation of the Ant Group IPO the day before with the fact that the “regulatory environment” had changed. This could mean that Ant Group could not meet the IPO and disclosure requirements.

The debut should actually 34, 5 billion US dollars, about 29, 2 billion euros, and the largest initial public offering of Saudi Aramco to date of 29 dwarfing billions of dollars in December. The Ant Group would have been valued at more than 300 billion dollars – more than the US bank JP-Morgan Chase & Co or four times more than the investment house Goldman Sachs .

crackdown on Ant Group The supervisory authorities, however, abruptly and surprisingly cracked down on the Ant Group, which was after Experts estimate that a general overhaul could be imminent. Sean Darby from the US investment bank Jefferies saw a targeted step: “It has happened before when companies seem to have become too big for the government for the taste of the authorities,” Darby told the finance agency Bloomberg .

The government tightened the screws over the weekend with deliberations of the Finance Committee led by Deputy Prime Minister Liu He. New plans for restrictions on online lending were presented on Monday, which are likely to severely affect the Ant Group’s business. According to this, such companies must in future 30 finance themselves percent of the loans that are granted together with banks. At the Ant Group, however, it is only two percent, as the Chinese business magazine Caixin reported. With a share of 39, 4 percent in the first half of the year, the lending business was already larger than the payment service Alipay, which 35, 9 percent of the revenue.

The action of the authorities is aimed at the credit platform, through the Ant Group loans from banks and other financial institutions to millions of consumers brings. Banking and insurance regulators want to dissuade lenders from using the fintech giant’s hub, reported Bloomberg . Some of them have already been asked to adhere to the drafts announced Monday for the future restrictions, the agency quoted informed people who wanted to remain anonymous.

Jack Ma in the regulators’ field of vision On Monday, Alibaba founder Jack Ma and other company executives were also summoned by China’s central bank and the banking and securities regulator. Because of the extraordinary procedure, it was speculated that the billionaire Ma might have drawn the wrath of the regulatory authorities.

A speech by China’s second richest man two weeks ago should not have been well received, it said . The Alibaba founder, who is otherwise always loyal to the Communist Party, had sharply criticized local and global regulatory authorities. “Good innovation is not afraid of regulation, but it is afraid of outdated regulations,” Ma was quoted as saying. The future should not be regulated “with yesterday’s methods”. (olb)