Ant Group will begin this week refunding Shanghai investors who had placed orders for what was expected to be a record-breaking public listing on the city’s technology board, but instead became a record-breaking suspension.
Why it matters: The suspension on Tuesday of Ant Group’s widely anticipated public offering has brought uncertainty among markets and investors. Retail investors had bid a total of $2.8 trillion for shares of the company traded in Shanghai.
- The Shanghai Stock Exchange said that the company may no longer meet disclosure requirements after changes in regulations. Ant Group then cancelled its listing in Hong Kong.
Details: The fintech giant will issue refunds to Shanghai investors beginning Friday until Monday, according (in Chinese) to a Shanghai Stock Exchange statement on Thursday, but didn’t specify the method.
- Ant Group and the principal underwriters will refund the application monies and brokerage fees, as well as interest at the bank deposit rate for the time period that the funds were on hold.
- The company began returning $167.7 billion to Hong Kong investors on Wednesday, and said it expected to complete all refunds by Friday.
- Refunds to Hong Kong investors were set to take place in two batches, starting with those whose applications were unsuccessful before moving onto successful bids. No such details for the Shanghai refunds were released.
- The Shanghai Stock Exchange’s refund announcement said that Ant Group and the lead underwriters had decided to suspend the Shanghai public offering, while the initial announcement said it had been the bourse’s decision.
Context: Ant Group had been facing increased regulatory scrutiny, particularly over its microlending platforms and position in the digital payments market, when the group’s controlling shareholder Jack Ma told a crowd of Chinese regulators and financiers that China suffers from overbearing regulation.
- After the billionaire’s speech, authorities called him and two other top Ant Group executives for a “regulatory talk” on Monday.
- New measures on microlending were announced on the same day, and Ant Group’s IPO was abruptly halted on Tuesday evening.
- Chinese media reported that it will be at least six months before the company is able to relist.