China suspending Jack Ma's IPO listings has political connection, says Report

The Chinese government in October 2020 blocked what would have been the world's biggest-ever initial public offering (IPO) for Ant Group, a company owned by billionaire Jack Ma. The $37 billion dual listings of Ant Group in the Shanghai and Hong Kong markets were suspended after months of shoulder-rubbing between Chinese regulators and top executives of Ant Group, including Ma. It was said that Ant Group had to suspend the listings because of changes in China's financial regulations related to online lending, the primary business of Alipay's parent company. 

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However, The Wall Street Journal in its latest report, claims the suspension order may have come directly from Chinese President Xi Jinping because of certain opaque investments in Ant Group by top political families of China. According to the report, one of the companies that invested in Ant Group is linked to the grandson of former President Jiang Zemin. Another firm owned by the son-in-law of former Politburo Standing Committee member Jia Qinglin also invested in Ant Group and was set to benefit from its IPO listings. 

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The report says that Xi Jinping saw these beneficiaries as a potential challenge to himself and his inner circle. The Wall Street Journal report described them as a "coterie of well-connected Chinese power players". Ever since Xi Jinping assumed power in 2012, he has heavily clamped down on party members benefiting from their influence and position in the party. The Chinese President, who is often called the Mao Zedong of the 21st century, sees power abuse as a threat to the party's legitimacy. The report says that the investments from the Communist Party-linked families were amongst the other concerns that led to the suspension of Ant Group's IPO listings. 

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Ma & regulators working on restructuring plans

The Chinese regulators have also launched an anti-monopoly probe against the e-commerce giant Alibaba Group, accusing the firm of forcing merchants to choose between two platforms. However, reports have emerged lately suggesting Ma is working with the regulators on restructuring plans that would allow the government to subject Ant Group with requirements that apply to banks, which the firm previously dodged despite being in the lending business. 

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