The Chinese tech billionaire Jack Ma’s Ant Group is once again under fire from state authorities. In late 2020 the group’s IPO worth $37 billion was canceled; and now, regulators have asked all investors of the Ant Group to check all of their investments into the organisation. The order has been put forward by Chinese state regulators, and as per reports all state-owned banks and firms who have made investments into the Ant Group will need to present a report to the regulator.
It is not yet clear whether the government will be taking any action against the Ant Group based on the reports published by the investors; neither is there a deadline to do so. But, what is absolutely clear is that this will affect the shares of the Alibaba Group, of which Ant is an affiliate. The tech sector in China has been under heavy clampdown in order to ensure protection from financial risks, and this move is being considered as part of the same.
The regulation has caused major concern among the tech shareholders in China, especially in Beijing. It led to Cinda Asset Management Co, one of the biggest Chinese AMCs, scrapping their planned investments of $944 million in Ant’s consumer finance segment. The Alibaba Group is also listed in New York and they had been rallying for investments, however, the shares have dropped 5.3% hitting their lowest ever.
Ant Group has not yet commented on the move, but in the meanwhile, all state-owned firms will be submitting details of their investments in equities, asset-backed securities, and loans related to the Ant Group. Whether this move will have further effects, only time will tell. For now, Ant Group will be under heavy scrutiny.