Ant Group’s IPO could be revived after ‘problem solved’, hints China’s central bank governor

Chad Bray
·3-min read

China’s central bank governor Yi Gang raised the possibility on Tuesday that Ant Group, controlled by Chinese billionaire Jack Ma, could be allowed to pursue an initial public offering once it fully complies with the country’s law and has addressed customer complaints.

Regulators abruptly shut down Ant Group’s US$34.5 billion dual listing in Shanghai and Hong Kong in November over concerns that the world’s largest financial technology company posed a systemic risk and was violating consumers’ privacy. Soon after, Beijing announced a raft of new fintech regulations and an antitrust inquiry into the nation’s technology sector.

The Hangzhou-based group, which operates the ubiquitous Alipay mobile payments platform, and its rivals, such as’s fintech unit, have begun restructuring their businesses to comply with the new rules.

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Speaking during the World Economic Forum’s Davos virtual conference, Yi, the governor of the People’s Bank of China (PBOC), said regulating the Ant Group situation was “a complicated issue”, but stressed that the pulled IPO and restructuring had not disrupted payment services to the public.

“This is a process. Once the problem [is] solved it will go back to the track to continue consideration according to law,” Yi said in response to a question about approving Ant Group’s IPO sometime in the future. “You just follow the standard of legal structure, you will have the result.”

Ant Group is an affiliate of Alibaba Group Holding, the parent of the Post.

Yi’s comments echo those made by Fang Xinghai, the vice-chairman of the China Securities Regulatory Commission, in mid-November, soon after the IPO was cancelled. Fang said a revival of the IPO would depend on how quickly Ant Group responded to the “changing regulatory environment”.

Chen Yulu, a PBOC deputy governor, said last week that Ant was working to rectify problems in accordance with targets set by regulators.

People's Bank of China governor Yi Gang called for more international cooperation on data regulation. Photo: EPA-EFE
People's Bank of China governor Yi Gang called for more international cooperation on data regulation. Photo: EPA-EFE

Ant Group previously said it planned to use a subsidiary, Zhejiang Finance, to satisfy a requirement by regulators that fintech companies set up a financial holding company and apply to the central bank to do so by November 1.

On Tuesday, Yi said that financial innovation in the mainland has been beneficial, particularly in encouraging financial inclusion and lowering transaction costs. However, he said there were risks in terms of consumer protection and misuse of monopoly power.

“The key point is: while you have an environment that encourages financial innovation, at the same time, the legal framework has to be very clear,” Yi said. “For example, the ownership of the data and how to protect consumer privacy and also how to safeguard [against] the abuse of some monopoly power, that is very important.”

He noted the PBOC recently announced regulations on third-party payments, mobile payments and consumer data protection.

Yi also called for greater international cooperation to protect people’s data, citing two recent laws adopted by the European Union – the Digital Services and Digital Markets Acts.

The updated rules include restrictions on how so-called digital gatekeepers, dominated by Silicon Valley giants such as Facebook and Google, use consumer data in their businesses.

Because of its cross-border nature, fintech – and innovation in the industry – would be better served by international cooperation between Europe, the United States and other developing countries, Yi said.

“Jointly, we can get closer to a common consensus for the regulatory framework,” he said. “That would be a benefit to everybody, especially a benefit to the low-income people using inclusive finance.”

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