FX.co ★ Сhina's government tightens grip on Ant Group

The Chinese authorities are increasing pressure on Ant Group, which is an affiliate company of the Chinese Alibaba Group owned by Jack Ma. The world's largest company has fallen out of favor ahead of its first public offering, IPO. China suspended Ant Group’s $37 billion listing, hindering the world’s largest stock market debut with just days to go. It was a dramatic blow to the financial technology firm.

Some experts suggest that the company got a stab in the back from the government after the harsh statements of Jack Ma. He publicly criticized the People's Bank of China and the current financial rules. Apparently, Ma thought that his words would have no consequences but China’s government did not ignore such attacks. It increased pressure on the company almost immediately by launching an investigation and blocking the IPO.

As a result, an unreported central-government investigation opened several cases against the beneficiaries of the transaction and claims to restructure the business to the size of a regular holding company. By taking such measures, the government planned to slow down the rapid development of the company and deprive Jack Ma of the status of a dominant player in China’s high technology sector. Some independent experts assessing the future of Ant Group suppose that it may become a state-owned company.

However, there are some problems with investors as well. Boyu Capital, a China-focused investment firm, could reap huge profit too. Its largest shareholder is Jiang Zhicheng, the grandson of former Chinese leader Jiang Zemin. If Ant Group had entered the stock exchange, the founder of Alibaba and top managers of Ant, as well as the owners of Boyu Capital, including Zemin, would have received big gains.