Alibaba Group’s US-traded shares dropped by 9.6 percent on Tuesday as Ant Group said its listings in both Shanghai and Hong Kong have been suspended. Shanghai Stock Exchange announced the suspension late on Tuesday, less than 48 hours before shares were to begin trading and one day after Jack Ma and senior executives at Ant Group were summoned by the Chinese.
The Shanghai Stock Exchange cited “Major issues such as changes in the fintech supervisory environment raised concerns over whether Ant Group could now meet listing requirements.” The initial public offering (IPO) was set to be the world’s biggest set at 34 billion dollars.
The Chinese state media warned about potential financial instability due to Ant Group’s rapid upward surge which might have acted as a precursor for this shocking move.
The government had imposed new regulations to keep China’s growing online lending industry under check to reduce the threat of runaway debt, a sector Ant Group has aggressively progressed in the recent period. Ant Group has revolutionized commerce and personal finance in China with more than 700 million active users and has also regulated finance sector by venturing into personal and business lending, wealth management and insurance.