Even the Supreme Leader Feels Displeased with Ma Yun... "President Xi Decides to Halt Ant Group IPO"

WSJ Report... "Unclear Whether It Was Initially Proposed"
Clear Intent to Solidify the System Revealed

[Image source=Yonhap News]

[Asia Economy Reporter Naju-seok] The person responsible for halting Ant Group's initial public offering (IPO), which had attracted attention as the largest ever, was Chinese President Xi Jinping, the Wall Street Journal (WSJ) reported. While there had been speculation that former Chairman Ma had upset the Chinese government, leading to the sudden IPO suspension, this is the first time the fact has been confirmed by citing Chinese government officials, along with reports that President Xi himself gave the directive.

On the 12th (local time), WSJ cited sources within the Chinese government, reporting that after former Chairman Ma, who holds a 50.5% stake in Ant Group and is its largest shareholder, criticized Chinese financial authorities, President Xi decided to halt the IPO. According to these sources, after reading Ma’s speech, President Xi was enraged and ordered financial authorities to investigate, effectively instructing them to stop Ant Group’s IPO. However, the newspaper added, "It is unclear whether President Xi was the first to propose the IPO suspension or if it was another official."

Ant Group had originally planned to list 1.67 billion shares on the Shanghai and Hong Kong stock exchanges on the 5th, aiming to raise over $31.8 billion (35.41 trillion KRW). This IPO was expected to surpass the record for the largest IPO set by Saudi Arabia’s state-owned oil company Aramco in December last year ($29.4 billion). However, the Chinese government shocked the market by announcing the suspension of the listing schedule two days before the IPO, on the 3rd. Officially, it was a postponement, but since there was no mention of a new schedule, it is widely viewed as an indefinite suspension.

Former Chairman Ma sharply criticized Chinese financial authorities at a financial forum held in Shanghai on the 24th of last month. Ma said, "In the case of China’s financial system, since there is no real system, there can be no systemic crisis." He harshly criticized the Chinese financial authorities, who had imposed various regulations to prevent a financial system collapse. He added, "Because they focus only on risks, they overlook development," and criticized, "The pawnshop-style mindset of the financial authorities is harming entrepreneurs."

The Chinese financial authorities were furious at Ma’s remarks. Until then, they had implemented regulatory policies aimed at preventing financial crises, and Ma’s comments contradicted this policy direction. Subsequently, Ma was summoned by the financial authorities.

From President Xi’s perspective, Ma’s remarks could be seen as a threat to the leadership system of the Chinese Communist Party, WSJ reported.

The fact that President Xi was directly involved in Ant Group’s listing can be interpreted as placing greater emphasis on consolidating the regime. Since coming to power in 2012, President Xi has called for the eradication of corruption within the Chinese government and military, and has also targeted groups such as Dalian Group and Anbang Group. A Chinese government official said in this regard, "President Xi is not interested in who is on the rich list, but he cares about what they do after becoming wealthy, whether they align their interests with those of the state." This means that while individuals in China may accumulate wealth, challenges to the regime will never be tolerated.

There is also a more structural perspective. Chinese financial authorities have been tasked with leading financial innovation while maintaining control, a contradictory role. In this respect, Ant Group was both the flagship of China’s financial innovation and a difficult challenge for financial authorities to maintain control over. To address this issue, the Chinese government launched the Financial Stability and Development Committee (FSDC) in 2017, led by Vice Premier Liu He, to coordinate financial regulatory agencies.

Eswar Prasad, a Cornell University professor who served as the head of the IMF’s China division, said, "The relationship between Ant Group and the Chinese government was complex. Ant Group’s influence was so great that individual government agencies could not rein it in, but following Ma’s speech, the Chinese government took action."

This content was produced with the assistance of AI translation services.