China’s decision to halt Ant Group’s highly anticipated $37 billion initial public offering (IPO) has been supported by a leading state-backed newspaper, which described the move as “necessary, reasonable, and legal.” The decision comes amidst growing concerns over financial stability and the risks posed by large technology conglomerates in the country’s financial sector. The suspension deals a significant blow to Ant Group, the fintech firm founded by billionaire Jack Ma.

The Chinese Securities Journal quoted Zhang Zixue, a professor at China University of Political Science and Law, who stressed the importance of Ant and its intermediaries carefully evaluating the problems and risks highlighted in public opinion and implementing effective preventive measures. In response to the IPO suspension on the Shanghai stock exchange’s STAR Market, Ant Group also decided to freeze its dual listing in Hong Kong, which was originally scheduled for Thursday.

Reports suggest that these decisions were made following a meeting between China’s financial regulators and Jack Ma along with his top executives. During the meeting, it was conveyed that Ant’s online lending business would face stricter scrutiny. This development has triggered widespread discussions on China’s social media platform, Weibo, with “Ant Group’s IPO suspended” becoming the top trending topic. More than 640,000 discussions have taken place, reflecting the public interest and concern surrounding the issue.

On Weibo, many commentators have noted the regulators’ prior leniency towards Ant’s rapid growth but argued that the IPO had changed the situation. They believe that the risks associated with Ant’s operations will now directly affect its shareholders and the general public, necessitating stricter regulations. Criticism has also been directed at Jack Ma, who spoke at an event last month and criticized the current financial and regulatory system for hindering innovation. Some users feel that Ma has exceeded his limits and forgotten his position within the system.

China’s firm stance on regulating the fintech sector indicates that the government prioritizes financial stability and risk management. The suspension of Ant Group’s IPO sends a clear message that even major technology giants must abide by regulations and face heightened scrutiny to ensure a fair and stable financial environment. As the situation continues to develop, it remains to be seen how Ant Group and its stakeholders will navigate the forthcoming challenges.

Useful links:
1. Reuters: China says Ant Group IPO is high-risk move for individual investors
2. CNBC: China suspended Ant Group’s listing — here’s what you need to know