Monday | April 12, 2021

China’s Regulators Summon Jack Ma Over $37B Ant IPO

Jack Ma, founding father of China’s fintech big Ant Group, and two different executives have been summoned on Monday by China’s high monetary regulators for talks, forward of the corporate’s $37 billion public providing.

In a short statement, the Folks’s Financial institution of China (PBOC), the China Banking and Insurance coverage Regulatory Fee, China Securities Regulatory Fee and the State Administration of International Alternate mentioned that they had “conducted regulatory talks with Ant Group’s actual controller Jack Ma, chairman Eric Jing, and chief executive Simon Hu.”

The regulators supplied no additional particulars in regards to the talks.

The discuss got here after Ma gave a speech final month in Shanghai, mentioning the shortage of a wholesome monetary system in China and urging the reform of monetary rules

“China is not facing a financial systemic risk, but a risk that still lacks a healthy financial system,” Ma mentioned. “Today, banks are still operating with a pawnshop mentality, needing collateral and guarantees are just like pawn shops . . . China’s financial pawnshop mentality is the most serious,” he added.

Ma additionally mentioned there are too many controls in monetary rules. “Today, there are too many documents that don’t allow you to do something but too few supportive policies coming out. I am most afraid that after such supervision, risks disappear and relative department risks disappear, but the entire economy is at risk of not developing.”

Ma’s speech triggered heated controversy simply as Ant priced its IPO.

Monetary Information, managed by PBOC, printed an article on monetary improvements and rules after Ma’s speech.

“Someone criticized bank loans as pawnshop mentality, but big tech companies engaged in financial services use collateral in their actual lending just like bank loans,” it mentioned.

“Big tech companies, as new entrants to the financial services industry, inevitably want to do financial services without being regulated. This new entrant will not only have an impact on the market landscape, but will also have a significant impact on the regulatory landscape, and will need to focus on preventing its evasion of regulation and regulatory arbitrage behavior.”

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The article wrote that “China’s financial system has certain problems. The Central Committee of the Party and the State Council have seen these problems and have focused on fixing shadow banking, strengthening corporate governance of small and medium-sized banks, and enhancing financial supervision in recent years. Similarly, just because there are some problems with financial regulation, big tech companies can’t demand superior treatment and be allowed to expand unchecked without regulation.”

In response to the talks, Ant Group mentioned on the identical day that they may “implement the meeting opinions in depth, and continue to follow the guidelines of ‘stable innovation, embracing supervision, service to the real economy, and openness for mutual benefit’, in order to continue to improve our inclusive service capabilities, and assist the development of the economy and people’s livelihood.”

Ant Group’s shares will begin buying and selling concurrently in Shanghai and Hong Kong on Thursday for a $37 billion inventory sale after allotment, which has damaged all information as the biggest fundraising in world finance.

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