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Alibaba Group Holding Ltd (NYSE: BABA) backed Ant Group is unlikely to be able to suspend its IPO until 2022, Bloomberg reported on Sunday.
What happened: Chinese regulators are requiring Ant to comply with new and proposed rules applicable to various areas, including consumer lending, regulators familiar with the matter told Bloomberg.
Officials have reportedly said that it is unlikely that with so much work to be done by Ant to comply with the new regulatory framework and some applicable rules are not yet clear that the IPO will take place before 2022.
The immediate priority for Beijing is for the ant founded by Jack Ma to comply with the changing regulatory environment, Bloomberg noted, citing officials.
Why is this important: A joint task force led by the Financial Stability and Development Committee – a regulator of the financial system – alongside departments of China’s central bank and other regulators oversees Ant and is in contact with the company to collect data and materials, according to two Bloomberg sources.
The task force is studying the restructuring of the company and also drafting new rules for the industry itself.
Under the new draft rules introduced in November, Ant would be required to replenish capital to the tune of $ 12 billion, Bloomberg noted.
This month, Ant Group CEO Daniel Zhang hailed Beijing’s new project as “timely and necessary.”
The CEO’s position is markedly different from that of Ma who criticized Chinese bankers and regulators before the now-suspended IPO which led to a reprimand.
Price action: Alibaba shares fell nearly 0.4% to $ 276.48 on Friday and gained 0.12% in the after-hours session.
Related link: Why China slashed Jack Ma’s IPO hopes, experts say
Photo courtesy: World Economic Forum via Flickr
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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