The fallout from the Ant Group’s IPO was disastrous to say the least: $35 billion worth of shares were never listed, CEO Jack Ma—China’s richest man—disappeared for weeks on end, and global investors were spooked by the sudden assertion of Beijing’s authority on the market. The lastpoint led to around $200 billion in value being lost from Alibaba, Tencent, JD.com and Meituan stocks, according to a Bloomberg report.
Now, according to multiple reports, the Ant Group has agreed to a restructuring plan with China’s regulators, which will see it form a financial holding company incorporating all of Ant’s businesses including its credit, insurance, investment technology and blockchain operations.
The Financial Times said the restructuring might be announced before the Chinese new year holiday begins on February 11 will and subject the firm to stricter capital requirements, making it more like a bank than a tech company.
The Ant Group had a massive fintech presence: A subsidiary of the Ant Group even ran what was the world’s largest mutual fund until early 2020, with about a third of China’s population reportedly invested in the Tianhong Yu’e Bao fund.
A successful deal with Beijing would remove much of the uncertainty around its day-to-day operations.
The tension between the Ant Group and Beijing appears to have sparked from a speech Jack Ma gave a week before the IPO, where he appeared to criticise Chinese regulators.
Ma disappeared for months before making a brief reappearance on January 20, when he interacted with 11 rural teachers via video. The rancour, however, appears to have remained. A list by Shanghai Securities News of China’s greatest entrepreneurs conspicuously excluded Ma from it.
